PortalPlayer Private Limited, hitherto a wholly owned subsidiary of PortalPlayer Inc, has announced that it will become an independent entity under a new identity, Pinexe, that would provide highly skilled outsourced design and development services to the digital audio and embedded systems market.
The company entrusted the task of recommending a new capital structure to Ernst & Young which is expected to be completed by September end. In the new equity, the US promoter, employees of Pinex and one or two angel investors will hold stakes.
"We might invite the angel investors at an appropriate time, based on our fund requirements. The possibility of an IPO too can not be ruled out in the near future," J A Chowdary, the president and chief executive of Pinexe, said at a press conference here. The US parent has so far invested about $5 million in the four -year-old Indian company.
Pinex currently has about eighty employees. "We will keep the existing operations in tact, which means supplying chip designs and other software solutions to PortalPlayer, while also catering to other customers' requirements. In fact our parent will be Pinexe's first customer," Chowdary said.
"There exists a great potential in the Internet appliances, mobile computing, hardware design and system software solutions. We could not enter into these areas so far because our parent was a niche player focusing on audio, video and imaging solutions, he explained. Pinexe will also become a third-party preferred partner for the US company's products and solutions in specific regions", he said.
Pinexe, which stands as an acronym for Portable Internet-enabled Next generation Electronics will establish offshore development centers in other parts of the country too, with the first such center to come up at Bangalore in the near future.
"By moving to the new model, we will give our customers access to a highly skilled development team that is capable of scaling up or down as demand shifts, and yet will allow us to maintain the lowest possible overhead cost, Gary Johnson, the president and CEO of PortalPlayer Inc said.
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