3i Infotech to buy Regulus Group for $80 mn

Software services firm 3i Infotech Ltd has signed an agreement to acquire US-based Regulus Group LLC for $80 million.The agreement provides for an additional $20 million as earn-outs based on certain performance agreements, it said in a statement. 3i is buying the US company along with its products, trademarks and brands.

Regulus provides remittance and bill processing services. For the year-ending December 2007 the company reported revenue of about $148 million. "The acquisition of Regulus Group is a strategic one and will enable 3i Infotech to strengthen its positioning in the payment processing industry," Managing Director and CEO of 3i, V Srinivasan, said in the statement.

Mastek acquires STG for $29 mn

The Mumbai-based IT solutions and services company Mastek has acquired the US-based Systems Task Group (STG) International, an IP-based enterprise solutions provider to the North American property and casualty (P&C) insurance industry.Mastek bought the company through its wholly owned US subsidiary, MajescoMastek, in an all-cash deal worth $29 million (around Rs 116 crore).

This acquisition is the second such initiative by Mastek in the current financial year. Under terms of the agreement, MajescoMastek will hold 100 per cent stake in STG. While 85 per cent of the total consideration is payable at the time of acquisition, the remaining will be linked to ongoing performance and paid by way of earn-outs.The acquisition is being funded through internal accruals and bank borrowings.

The buy will strengthen Mastek’s presence in the non-life insurance segment and expand the opportunity pipeline in the overall insurance vertical. STG, headquartered in New York, has a fully integrated offshore competency centre in Mumbai (India).

Read more in
The Business Standard article.

Merrill hikes stake in Vakrangee to nearly 8%

Merrill Lynch has increased its stake in Vakrangee Software, an integrated document management and printing management solutions provider, to 7.72%. The total FII holding in Vakrangee Softwares is now 39.49%.

Dinesh Nandwana, chairman and managing director, Vakrangee Software, said: "With our strong positioning in the government and e-governance sector, we are also successfully tapping private and high growth sectors like telecom, insurance, financial services and retail. We have also ramped up our capacity by placing order on Eastman-Kodak for the acquisition of a state-of-the-art variable data digital colour printing facility to increase output from 2.4 million pages per day to 4.8 million pages per day."

Vakrangee reported a 107% increase in net profit at Rs 13.53 crore for the quarter ended December 31, 2007 when compared with Rs 6.54 crore in the corresponding quarter last year.

Microsoft offers to buy Yahoo for USD 44.6 billion

Technology giant Microsoft Corp said on Friday that it had offered to acquire Internet media company Yahoo Inc for USD 44.6 billion in cash and stock.Microsoft said it had offered to buy Yahoo for USD 31 per share, which it said represented a 62 per cent premium above the company's closing stock price on Nasdaq on Thursday.

"We have great respect for Yahoo, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market," Microsoft Chief Executive Steve Ballmer said in a statement.

Yahoo was not immediately available for comment. Microsoft said it had identified four areas that would generate at least USD 1 billion in annual synergies for the combined entity.Yahoo shares rose 56 per cent to $29.95 in pre-market trading on Friday following the announcement. US stock index futures also jumped after the news was released.

3 Ahemadabad ITcompanies to merge

In a first-of-its kind merger in Gujarat, three Ahmedabad-based IT companies are gearing up to launch a new company to cater to three different verticals – software, hardware and IT education – they specialise in individually.

The companies – Cubit Computers, Dev Information Technology and ACT Computer Education – are in advanced stages of merging into a new entity, which will receive funding from a US-based private equity firm.

The team from Cubit Computers, one of the pioneers in launching the tablet PC in the country, will head the hardware services vertical.

Dev Information Technology, which has undertaken a number of government projects in Gujarat, will head the software business, while ACT will spearhead the computer education services segment for the new entity.

Read more in The Business Standard article.

Wipro buys Oki arm for $2-3 million

Bangalore-based Wipro Ltd announced on 28 September it has inked a definitive agreement to acquire Oki Techno Centre Singapore Pte Ltd (OTCS), a wholly-owned subsidiary of OKI Electric Industry Co Ltd.

“Wipro has signed a definitive agreement to acquire Oki Techno Centre Singapore Pte Ltd, including its intellectual Property Rights in an all cash deal over a period of one year,” a company statement said.Although the company did not mention the financial details of the deal, sources said it has acquired OTCS for $2-3 million.OTCS is a 40-member centre, with customers in Japan in the product engineering space.

Read more in The Livemint article.

Infosys linked to buyout talks for UK's Sage

Infosys Technologies is in the thick of yet another European buy-out rumour --this time involving the UK-based Sage Group.British publications have reported that Sage's stock price on the London Stock Exchange went up on Tuesday on talk that Infosys, CapGemini orsoftware giant Microsoft may be interested in acquiring the company.

The publications said that a couple of institutions picked up shares in Sage even as retail investors in the Britain were rushing out of banking-related stocks following the run on Northern Rock bank.

Headquartered in Newcastle upon Tyne, the Sage Group is a supplier of accounting, payroll, CRM and business management software for large, medium and small size enterprises.

Read more in The Times of India article.

Patni stake sale stalled

Mumbai-based Patni Computer System’s stake sale has been stalled, perhaps indefinitely, according to sources close to the development.

The reason for the delay has been attributed to a lack of “common meeting ground” between the brothers. “While the two brothers kick-started the stake sale, they now do not want to dilute their entire stake in the company and want to continue having some rights and privileges in the company,” said the source.

It has been rumoured that private equity players such as the Texas Pacific Group and Apax Partners were in the final lap of purchasing the shares of the two Patni brothers and that due diligence was in progress.

The two Patni brothers — Ashok and Gajendra — who want to sell their stake, together own about 29 per cent stake in the company, which is the country’s sixth largest IT services company. While General Atlantic Partners, which holds a 16.38 per cent stake in the company, has no plans to exit in the immediate future, as a financial investor, it will consider a stake sale if the price is attractive. Other institutions holding stake in the company include Merrill Lynch and UBS. However, any stake sale will be possible only after receiving Narendra Patni’s consent since he has the first right of refusal. Sources said that even if Narendra Patni did agree to a stake sale by his brothers, he was unwilling to give up control over the company.

Read more in The Business Standard article.

MindTree says will seal buyout deal this fiscal

MindTree Consulting Ltd is actively scouting for acquisitions in the telecom and home appliances space, and is likely to finalise a deal before the end of this fiscal.The Bangalore-based IT consulting firm, which raised Rs 200-odd crore early this year through an IPO, is looking to grow inorganically to enhance its delivery capacity in niche areas.

“At any given point in time, we are evaluating 2-3 targets. We will surely be making an acquisition during this fiscal. It will be a niche company to fill up gap in our current offerings. The buyout will be done to enhance our delivery capacity and not to expand our market,” said S Janakiraman, president and CEO, research and development services, MindTree Consulting Ltd.

Janakiraman said the size of the deal would be anywhere between $5 million and $10 million, and could even be bigger if it fulfils the requirement of the company.And since the acquisition will be driven by the intent to improve delivery capacity, Janakiraman said it would either be in India or any other low-cost country.

Read more in The DNA Money article.