Cambridge Tech eyes Rs 50cr revenues this fiscal

Acquires US-based ComCreation for $3.5 million.

Buoyed by the acquisition of ComCreation Inc and its strategic partnership, Hyderabad-based Cambridge Technology Enterprises Limited (CTEL), a provider of service-oriented architecture-based solutions, is expecting its topline to cross the Rs 50-crore mark this financial year.

The company on Monday announced the acquisition of ComCreation, a provider of outsourced product development and testing centres for independent software vendors, for $3.5 million (approximately Rs 14 crore). While $2.3 million is the guaranteed amount, $1.2 million is an earnout.

"This acquisition would add ConCreation's hi-tech vertical to CTEL, increase our current fiscal revenue by $5 million (around Rs 20 crore) besides bringing its Bangalore global development centre under our fold. This would also double our headcount and enhance our customer base," Bhaskar Panigrahi, chief executive officer of CTEL, told Business Standard.

CTEL has its development centres in Hyderabad and in the US. It currently employs 140 professionals, while ComCreation has an headcount of 120 at its Bangalore global delivery centre.

"Our Hyderabad development centre's capacity is scalable by another 60 seats and at ConCreation's Bangalore centre by another 120. We intend to take our headcount to 400 by this fiscal end," he added.

Besides, the company, this month, entered into a strategic agreement with ProVentive Inc, a provider of intervention and performance management for the healthcare industry.

The scope of the partnership includes completing the software development of ProVentive's product HealthFlo at customer sites. "We expect this partnership to add anywhere between Rs 3 crore and Rs 4 crore to our revenues this fiscal," he said.

Stating that the company's pursuit for strategic acquisitions is a continuous process, Panigrahi said CTEL was currently in talks with eight companies that are into product development "� five in the US and three in India "� for acquisitions.

"A few negotiations are at advanced stages and closing of the acquisition should happen this fiscal itself," he said.

CTEL had raised Rs 24 crore through an initial public offer (IPO) earlier this year and has fund reserves of around Rs 6 crore post the acquisition of ConCreation. The company plans to utilise this for funding its new buyout.

Cambridge Technology's total revenues on a consolidated basis stood at Rs 23.6 crore for the year ended March 31, 2007, compared with Rs 18.66 crore for the 15-month period ended March 31, 2006, a growth of 58 per cent.

The 15-month period financials ended March 31, 2006, was un-consolidated, since the company did not have any subsidiary as on that date. The company's net profit grew 64 per cent to Rs 5 crore, compared with Rs 3.84 crore for the 15-month period.