Valtech acquires Majoris for $6 million

Valtech, the French technology consulting firm, has announced that it has agreed to acquire the Bangalore-based Majoris for a base price of $6 million.

The agreement includes a three year earn-out that could add a maximum of $4.5 million to the transaction price. The deal will be financed through existing and future free cash flow of Valtech.

Majoris was founded in 2000 by a group of experienced IT professionals led by BV Venkatesh, formerly the CEO of BFL Software. The company has 200 billable employees and generated revenues of around $6 million in 2003-04 and is certified at the Level 5 of CMM.

The company has 10 active customers and mainly serves the industry segments of banking and financial services, healthcare, manufacturing and retail, and telecommunications. Majoris had received angel funding of Rs 20 crore.

Valtech India and Majoris will merge their operations in the coming weeks to form a common offshore delivery infrastructure for all of Valtech's international operations.

The combined operations will employ over 300 people in India with 18 active customers in Europe and the USA. In addition, Valtech will invest up to $1.25 million over the next 12 months to build up the Indian delivery centre infrastructure.

The acquisition of Majoris is being consolidated from September 1, 2004. The completion of this transaction is subject to approval from the Indian regulatory authorities.

Said Jean-Yves Hardy, CEO, Valtech: "I am pleased to announce a significant step in the execution of our offshore strategy; the acquisition of Majoris, an Indian player delivering the highest quality standard with a strong management team. Valtech can now leverage an experienced delivery centre of more than 300 employees in India (combining Majoris and our existing team). This will benefit both our customers, who will get access to a broader set of skills and our operations by supporting an increased range of sales opportunities."

Valtech is widening its offshore strategy after three years of decreasing corporate costs.

"The recent take off of our offshore strategy is adding significant new operating and investment costs in India. Valtech is committed to continue investing in our offshore infrastructure to enter the league of global offshore players within the next two years," Hardy added.