DSQ scripts $30 m stock deal to buy U.S. firm

By Our Special Correspondent

CHENNAI, JULY 10. DSQ Software Ltd. will acquire unlisted San Vision Technology Inc. (SVT) of the U.S. in a $30 million stock- all deal. The board of DSQ today approved the move.

An extra-ordinary general body meeting of the shareholders will be convened shortly to ratify the deal. Mr. Pawan Kumar, President and CEO of the company, said the entire process would be completed within 45 days.

Addressing a press conference here today, Mr. Dinesh Dalmia, Vice-President, said the stock deal would result in only a `minimal dilution' of the promoters' equity in the company.

In any case, SVT acquisition will see the capital of the company going up by around 3.5 per cent from its existing base of Rs. 33 crores.

While declining to dwell on the price at which the stocks would be offered to the promoters of the New York-based SVT - Mr. Sanjay Sethi and his ilk, Mr. Pawan Kumar, nonetheless, said DSQ would allot fresh shares that would in all total $30 million in value term.

Mr. Dalmia said DSQ sought to acquire the U.S. company in view of SVT's healthy client list which included, among others, names like AIG, JP Morgan, Merrill Lynch, AT&T, Cable Vision and Deutche Bank. SVT, Mr. Pawan Kumar claimed that the company realised a revenue of $15 million during fiscal 1999. The company was set to reach a revenue of $25 million in the current fiscal year.

Both had indicated that over time SVT would be merged with DSQ Software. To keep the 160-strong SVT employees in tact, DSQ would offer them a stock option. Even after the sale of SVT, Mr. Sanjay Sethi would stay back, serving as DSQ's Senior Executive in the U.S.

Mr. Dalmia said the promoters had to call its quits since managing SVT's growth after a point proved beyond their individual capacities.

Mr. Pawan Kumar said DSQ was close to finalising one more take- over in the U.S. The company concerned had an ERP focus and involved in the areas of telecom network and supply chain management.

Both expected the acquisition to put DSQ into a new orbit of IT services for financial sector as over 50 per cent of the revenue of the acquired company came from banking and insurance sector.

Send this article to Friends by E-Mail

Section  : Business
Previous : Telecom PSEs have lion's share in valuation:
           survey
Next     : Selling in ICE counters pulls down Sensex