Logica on the prowl for services firm

LogicaCMG, the E2 billion London-based software services major, is on the prowl in India to acquire a Rs 75-100 crore software services firm focusing on either telecommunications or financial services.

Seamus Keating, director, group finance, said: "On a global scale we are among the top 20-30 league in software engineering services. We have outlined plans that we have to break into the top 10 in this segment in five years. On this roadmap, we have an absolute need to grow inorganically and with India's software prowess well chronicled in telecommunications and financial software services, we are looking for a 500-plus manpower organisation for acquisition in India."

Roughly translated, on the current revenue generated per employee of around Rs 12-15 lakhs levels in the Indian software services segment, this amounts to an organisation having a turnover of Rs 75-100 crore.

Keating further added that LogicaCMG will most probably leverage its appreciating stock value for acquisition as results of the merger between Logica and CMG are being felt increasingly evident.

The company currently has a 600-strong software services team in Bangalore servicing its global clients and acts a major base for trimming costs globally.

A number of significant cross-selling opportunities have been realised, most notably a recent contract win with a major bank to carry out their system testing globally using TestFrame methodology, with a significant element carried out here in India.

The company, which is emerging as a significant player in the wireless networks, is increasingly banking on the Indian prowess in this sector and has stated that the cost reduction and return to profitability programme is driven by relocation of activity to India.

The global major is also spending around Rs 110 crore during 2004 in India for ramping up manpower and infrastructure needs.

LogicaCMG in addition to leveraging India's software potential is also looking at India being a major market for its services and is expecting to garner around 7-10 per cent of its global revenues over the next 5 years.

"We have made significant wins in India, including the real time settlement contract from the Reserve Bank of India and this should be on stream in the next couple of months. The win gives us impetus to approach other Indian banks to facilitate real-time cheque clearing solutions," Keating said.

The company has won a $1.2 million contract from Tata Teleservices for implementing a unified messaging solutions which will enable their subscribers to use UMS services such as voicemail, email and fax in a single environment.

In addition to this, it has also implemented its multimedia messaging centre services to help Airtel meet the capacity, performance and reliability requirement necessary to support the introduction and growth of premium MMS services.