Nettlinx to acquire 3 US firms

Nettlinx Limited, a Hyderabad-based Internet service provider and software development firm, is looking at acquiring three US-based web solutions companies at a cost of $3 million (about Rs 12 crore).

"The first acquisition is expected to be completed by the end of October 2007 and the acquisition of two other companies will be completed by the end of this financial year," Nettlinx executive director, Vijay Bhaskar Reddy, told Business Standard adding that the three companies were engaged in the business of web hosting and providing web solutions.

The acquisitions would be funded through a debt of Rs 8.8 crore and internal accruals of Rs 3.2 crore.

"With these acquisitions, our turnover should double adding $1 million (Rs 4 crore) more to our bottom line," Reddy said. In 2006-07, Nettlinx posted an income of Rs 11.68 crore and a net profit of Rs 5.25 crore.

With the appreciation of rupee against dollar, Reddy said that there was now scope for Indian companies to expand their horizons beyond Indian shores which Nettlinx was trying to do by acquiring US-based companies.

Stating that the operations of Nettlinx had been stabilised and there was a steady growth, Reddy said that the company was also actively considering to consolidate the existing business of internet services as well as support services to the IBM Global Scon.

Last year, Nettlinx diversified into real estate and media business by floating two 100 per cent subsidiaries, Nettlinx Reality Private Limited and Nettlinx Channel Private Limited. Both the companies, according to Reddy, will be fully functional in six months subject to obtaining the required clearances.

This apart, the company has acquired a 67 per cent stake in IADFAC Laboratories Limited of Bangalore, which is engaged in the testing of processed foods and other allied products.

The company intends to expand these facilities across south India to take advantage of the future requirements of the food industry for testing raw materials and finished products.