Helios & Matheson acquires 2 firms
Chennai-based
Helios & Matheson Information Technology Ltd has said it has acquired two
companies, Maruthi Info Tech Inc, US, and Jayamurthi Software Systems, Chennai,
for a cash payment of $ 7.5 million.
Announcing the deal in Chennai,
Muralikrishna G.K., its managing director, said Helios & Matheson plans to
acquire three more companies in 12-24 months, in an aggressive strategy to
increase its revenues to $ 100 million by 2006 from the present $ 40 million.
The
company is also planning to attain a critical mass of 2,000 employees by 2006,
up from the present 500 employees. Maruthi Info Tech is a $ 5 million company
having strong presence in healthcare and insurance space while Jayamurthi
Software is the offshore arm of Maruthi with a revenue of $ 1.2 million.
“The acquisition will give us
crucial penetration into the recession-proof healthcare sector,” Muralikrishna
said. Helios & Matheson, which is into banking and insurance solutions, will
pay 70 per cent of the acquisition amount now and the remaining 30 per cent
amount over a two-year period ending August 2006. This is the fourth acquisition
by Helios & Matheson in three years. In 2001, the company had acquired The
Laxmi Group Inc of the US and Bangalore-based SystemLogic Solutions Ltd for $ 2
million.
Maruthi is a US-based entity
that was established in 1999 and has grown over the last five years into a $ 5
million company with a track record of high profitability. Maruthi has a strong
presence in the healthcare and insurance space with close to 80 per cent of its
billings coming from these two sectors. Further, Maruthi has done end-to-end
solution planning and implementation for its clients, thereby garnering vital
domain expertise in the healthcare and insurance space. The company has US and
offshore development centres that help it provide quick and cost-effective
solutions to clients.
Jayamaruthi, an ISO
9001:2000-certified company, was established in 1999. It specialises in the
design, build and integration of business solutions and products. Its clients
include medium and large enterprises in the healthcare and insurance space. It
also serves as the offshore development arm of Maruthi.
The deal size is $ 7.5 million
and comprises payment in cash as well as earn-out on achieving targeted
financial milestones over a two-year period ending August 2006.
“We are very excited about
this transaction," said V Ramachandiran, chairman, Helios & Matheson.
"Healthcare is a very important vertical for us and Maruthi's clients are
market leaders in this space.”
Muralikrishna, managing
director, Helios & Matheson, said, “H&M has a history of growing
through acquisitions. We acquired The Laxmi Group, Inc and SystemLogic Solutions
Limited in 2001 and have integrated both companies seamlessly, positively, and
profitably into our fold."
"The merger with Helios
& Matheson is a perfect fit with our business strategy and our
competencies," said Pat Krishnan, co-founder and CTO, Maruthi, who was on a
visit to India from the US for signing the deal.
Skanda K. Ganesan, CEG,
Jayamaruthi, said, "The strong overseas marketing infrastructure of Helios
& Matheson will enable us expand our client base in the healthcare insurance
vertical."
Helios & Matheson, which
has an uninterrupted record of profits and dividend distribution since
inception, plans for an aggressive growth to $ 100 million revenue through
strong organic growth complemented by a judicious and focused acquisition
strategy.
The company is acquiring land
at Mahindra City, near Chennai, and the deal is close to finalisation.
Helios & Matheson had
recently announced a bonus issue of shares in the ratio of 1: 1 (one share for
every one share held). The bonus issue was intended to reward shareholders for
their loyalty and continuing support for the company. The bonus issue will also
improve the trading liquidity of the company's shares and consequently encourage
a wider spread of shareholders.
The bonus issue will be made by
capitalising a part of the company's reserves. The paid-up share capital of the
company would increase from Rs 5 crore to Rs 10 crore consequent to the bonus
issue.
For more information, visit www.heliosmatheson.com
