 "BVR Mohan Reddy")
Infotech Enterprises Ltd, an Indian software services provider to aerospace and automotive industries, plans to acquire at least one company in the US this year to expand in its biggest market.
The firm, backed by Carlyle Group LP, will use part of its Rs 600 crore ($96 million) cash for the purchase, Chairman and Managing Director
BVR Mohan Reddy said in an interview on Tuesday. The Hyderabad, India-based company has acquired nine rivals in the US and Europe since 1997, according to data compiled by Bloomberg.
Infotech plans to utilise its record cash pile to expand and revive profit after net income dropped for two straight quarters. The company might spend about $25 million on the acquisition, Reddy said, without identifying a target.
The company's cash reserves "in the best of times, is not giving more than nine per cent return," Reddy said. "So, understandably, we are very keen that we should go toward acquisitions."
Infotech's shares, which have gained four per cent this year, rose 0.4 per cent to Rs 186.85 at 12:21 pm in Mumbai. First Carlyle Ventures Mauritius owns 9.9 per cent in the company as on June 30, according to exchange filings.
North America accounts for more than half of Infotech's revenue, while it generates about 27 per cent of sales in Europe, according to Reddy. The company's sales rose six per cent to Rs 480 crore in the three months ended June 30.
