Omnitech close to sealing buys in the US, Europe for $35 mn

BSE-listed IT major, Omnitech Infosolutions, is close to sealing up to two acquisitions in Europe and the US for around $35 million even as it aims for a nearly four-fold growth over the next three years.

"We have short-listed four companies, two in the US and one each in the UK and Netherlands, for acquisitions. The deal-size for the US one is around $20 million and for the European one, around $15 million," the company's Managing Director, Atul Hemnani, told PTI here.

The company is open to multiple buys -- one in each geography, Hemnani said, adding that negotiations are in the advanced stage and "if all goes well, we should seal at least one deal in the next 45 days."

Funding would pose no problem as Omnitech has already tied-up Lines of Credit with two banks -- one domestic and one an MNC, he said.
       
"The Indian bank, in fact, has offered us the entire $20 million," he added.
       
The two US target companies are in the infrastructure management services (IMS) and application management spaces, respectively. The Netherlands one in the IMS domain and cloud-computing while the UK company is in the disaster recovery and business continuity and IMS segments, he said.
       
Omnitech's core business focus areas are IMS, application managed services and increasingly, cloud-computing.

The acquisitions would help Omnitech in adding clients and cross-selling its products in the US, Canada and Europe, Hemnani said.
       
Omnitech has subsidiaries in the US and Europe -- Omnitech Technologies Services Inc and Europe Omnitech Technology BV -- and the acquired companies would be merged with them. In the UK, however, a SPV might be created, he said.
       
The company has drawn-up an aggressive growth plan and aims to become a Rs 750-800 crore entity by FY 13.
       
While Hemnani declined to comment on this, it is understood that the company is expecting a 35 per cent growth organically. Around 30 per cent of business is expected to come from acquired businesses.
       
The company had clocked a turnover and PAT of Rs 216 crore and Rs 39.38 crore, respectively, in FY 10.