Ybrant eyes 3 more buyouts

Hyderabad-based emarketing solutions company Ybrant Technologies is looking at three more acquisitions "" in the lead generation space, search engine marketing and a 'different domain' "" to consolidate its position in the digital marketing arena.

The company is "poised to sign letters of intents (LoIs) with two US companies for acquisition in a month", according to M Suresh Reddy, CMD of Ybrant.

He, however, declined to speak on the deal size and timeframe for the buyouts. An announcement with regard to the acquisition would be made once the company is close to reaching a definitive agreement with the target companies, he added.

"The proposed acquisitions would be made at an investment of $5-10 million," a source close to the company said.

The company recently filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) to enter the capital market, as it is on the verge of sealing a deal with a private equity investor. "The cash piles will be used to take care of our proposed buyouts," said Reddy.

The eight-year old company, which started off as a caterer of online greeting cards in 1999, now designs, develops and implements web-based marketing systems and integrated online marketing solutions. These include bulk e-mailing, search engine marketing, affiliate networking, lead generation, management and banner advertising. It had acquired two companies "" Serbia-based Seenietix and the US-based MediosOne "" last year for undisclosed amounts. This year, it acquired the US-based online ad-network company AdDynamix for $10 million (about Rs 4.1 crore).

The global ad spend is expected to touch $35 billion this year and is bound to reach $120 billion by 2015. To cash in on this growing market, the company is also looking at consolidating its total service offerings. The digital market in India stood at $40 million last year and is on course to touch $160 million by 2010.

So far, Ybrant has been into back-end services in search engine marketing. This space has seen a lot of action in the last six months, with around 80 acquisitions. The major buy was that that of an online advertising network company called 'aQuantive' by Microsoft for $6 billion. "With the search engine business growing in the US, especially in travel, personal finance including credit cards and loans, we are now looking at extending our services on the front-end. Towards this, we are scouting for a front-end company. This, however, would take a while," said Reddy.