Zensar signs three deals in IM space worth $12mn

To expand in Europe;looking for acquisition in Germany

RPG group’s IT services firm Zensar Technologies today announced that it has signed three deals in its infrastructure management business in the US worth about $12 million. The deal win announcement saw a surge in the company’s stock price, which hit an intra-day high at Rs  643.35 per share up 11 per cent from the previous days closing price.

Of the three deals, one is a three-year managed services deal for security worth $ 8 million. The other two—a remote infrastructure management (IM) services deal towards end user experience and the other a managed Services deal including monitoring and support for storage and backup and network—are in the range $2 million to $3 million each.

“The Akibia turnaround has happened in a positive way and we can see the results too. At present 36 per cent of our business in this segment is on dual shore model. This was zero per cent a few quarters back. The pipeline in our IM business is around $200 million. Going ahead the growth profile of this business (infrastructure management) will be better than the company,” said Ganesh Natarajan, Vice Chairman and CEO, Zensar Technologies.

In 2010, Zensar had acquired US-based Akibia with an eye to expand its presence in the IM space. Natarajan also confirmed that by the end of June a lot of process and functions will be part of the offshore delivery model.

Natarajan also stated that over the next two years he sees good growth for business for the company both in terms of topline and profitability. “In terms of geography or horizontals, I think we are well placed. Our weak spot has been Asia and we are working on it,” he added.

He also added that the currency volatility will not impact Zensar as its exposure to Euro is less than three per cent. However, the company is trying to increase its presence in Europe. About 76 per cent of the company’s revenue comes from the US.

“We have been in Amsterdam so far, by next year we will open offices in Denmark and Sweden. We are also looking for acquisition target in Germany, as it’s a good SAP market. Though we have been looking at targets in the revenue range of $15-40 million we have not found any asset so far,” added Natarajan.

The stock of the company has been surging today on the Bombay Stock Exchanges (BSE). Zensar’s stock price closed at Rs  623.55 per share up 7.68 per cent from the previous close.