Friday, July 31, 2009

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Patni eyeing acquisitions in Europe

Software firm Patni Computer will seek acquisitions in Europe and the Asia-Pacific to help lower its dependance on the US, an official said on Thursday, boosting shares to its highest since November 2007.

The company will look at targets in the range of $50 million-$200 million, Chief Financial Officer Surjeet Singh told Reuters in an interview over the telephone.

"Having done the portfolio gap analysis now, we are also acquisitive as a firm. So, therefore, you will see inorganic activity as well," Singh said after the New York-listed Patni Computer Systems Ltd reported June-quarter results. "M&A (mergers and acquisitions) has always been a strong agenda. It is (a) much more strong agenda now and on all the dimensions ...to strengthen verticals, enhance scale of service lines and expand geographies."

The company had $350 million in cash, which would be used to fund the acquistions, he added. "If it is a good acquisition, I don't think size will be a barrier. We will go for it," he said. On the news, the shares extended gains to hit a near 20-month high of 344.35 rupees, up 18.3 percent, before easing to 333.10 rupees, up 14.4 percent at 1:32 pm. The acquisitions should enable Patni to raise, in 2-3 years, the revenue share of Europe to about 30 percent from 15-17 percent last year and that of Asia-Pacific to 10 percent from 5.6 percent, he added. Last year, Patni derived about three-fourths of its revenue from the United States.

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