Teledata buys Singapore firm for $105mn

Chennai-based Teledata Informatics today acquired a majority stake in the Singapore-headquartered IT distribution and PC maker, eSys Technologies, by investing $105 million (Rs 470 crore).

Teledata and eSys are also likely to invest $20 million (around Rs 90 crore) in Chandigarh to open a total business offshoring/outsourcing (TBO) unit, with at least 1,000 employees, over the next six months, according to a company source.

TBO is a concept that allows whole businesses to be outsourced and run from low-cost, high-skilled countries.

Currently, eSys utilises its centres in India and Singapore to carry this out.

Since 2004, Teledata has acquired 27 companies and with the recent acquisition of eSys, it is already in talks with two other companies in Europe for acquisitions.

"The company is in the process of acquiring a marine insurance business company and the other is a software provider for billing in the utilities space," said a company spokesperson.The valuation of these companies is much more than the recent acquisition of eSys.

"We have invested about $120 million in the company and will be investing additional 50 per cent of the already invested money in the next three months with an intention of acquiring all the other business of eSys," said K Padmanabhan, managing director, Teledata.

In 2005, eSys had a turnover of $1.676 billion and a profit of $15.5 million. The investment will enable the company capitalise on the synergy between Teledata and eSys.

Padmanabhan, while explaining the synergy between the two companies, said: "Every year we buy 3,000-4,000 personal computers for several e-governance projects. This year we plan to buy 15,000 PCs.The eSys acquisition will now make these projects cost effective." Vikas Goel, eSys group Chairman and managing director will be the CEO of Teledata Technologies and will hold 49 per cent in the company.

eSys already has a PC manufacturing unit in Delhi and is in the process of setting up another unit in Himachal Pradesh to produce 1 million units per year with an investment of Rs 250 crore.

"We might shut down the Delhi plant and shift the entire manufacturing capabilities to the new centre," said Goel.