According to Subex's guidance for FY07, it will have product revenue of Rs 240 crore with net profit of Rs 65 crore. Subex also said that it will touch product revenues of Rs 450 crore ($100 million) in FY08 with net profits of Rs 150 crore. The combined firm will have a total employee base of 500, including Azure's 200. Azure is a $31 million firm.
Commenting on the deal, Kiran Karnik, chairman, Nasscom said: "Acquisitions are a way of quickly acquiring scale, specific expertise or customers, and are therefore a path to rapid maturity and growth. It is in this context that I am really enthused to learn Subex has made what is the single largest overseas acquisition in the history of Indian IT space."
Subex is paying out close to 3% of the value in cash and the remaining is being funded through a stock deal. Subex is going in a for a Rs 13 crore GDR issue. As a result, Subex's current paid-up capital will go upto Rs 36 crore from the current Rs 23 crore.
In the new merged entity, the Azure management will hold 12%, while its three main investors, New Venture Partners, Doughty Hanson Technology Partners and Intel Capital will hold around 22.5% collectively, totalling upto 34.5%. Subash Menon will hold 12%, down from the current 18.57%.
Post the acquisition, Subex Azure will count amongst its customers 23 of the world