Hexaware to acquire US IT firm for $40 mn

Hexaware Technologies, a provider of IT and BPO services, is planning to acquire an IT company in the US or Europe for $20-40 million (around Rs 85-170 crore).

P K Sridharan, executive director and chief mentor, Hexaware, told Business Standard: "The next acquisition will also be an all-cash deal. Since, we want to penetrate the European markets quickly, an acquisition will make sense. "We are looking for a suitable fit in the enterprise resource planning (ERP) space for verticals such as banking and financial services or transportation domains."

The company is aiming at both acquisitions as well as investments in the infrastructure for fast growth in 2007-08. Hexaware had acquired FocusFrame in 2006 that is specialised in automated testing of ERP and custom applications for an all-cash deal worth of $34.3 million. With an order book in excess of $225 million and a run rate of 15 clients additions per quarter, Hexaware seems likely to achieve 23 per cent earnings growth over the next three years.

"We hope to increase our business from top 40 clients in the sub-$1 million range to $5-10 million this financial year," said Sridharan.

Meanwhile, the company is busy adding capacity by building new campuses in Chennai and Gurgaon.