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Patni to buy Cymbal for $68 m

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CIOL Bureau
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MUMBAI: Patni Computer Systems Ltd., India's sixth-biggest software services exporter, said it will buy Cymbal Corporation for $68 million in cash, in a deal analysts see as a big positive for Patni.



Shares in Patni rose as much as 6.1 percent to a new 52-week high of 373.90 rupees in a flat Bombay market, where better-than-expected earnings and guidance from bellwether Infosys Technologies Ltd. boosted software issues.



California based Cymbal, set up in 1998, specializes in telecommunications services and has software centers in North America, the UK and India. It had revenues of $32 million in the year to June 2004, according to a statement from Patni.



"Patni currently does not have a telecom practice and hence this will enable it to rapidly initiate its telecom business," said Apurva Shah, an analyst at brokerage ASK Raymond James.



"Given the steady growth being witnessed in the telecom software services space, we believe the deal could be attractive even from a financial perspective for Patni," he said.



Cymbal's clients include firms in wireless, cable and broadband, such as AT&T Wireless, Comcast Corp., Virgin Mobile, Hewlett-Packard, Sprint Canada and T-Mobile.



The deal is expected to close in 60 days, Patni said in the statement. Patni officials were unavailable for comment.



Newspaper reports two weeks earlier had suggested Wipro Ltd., the No. 3 services exporter, was the front-runner among Indian firms to buy Cymbal.



This is the latest in a series of recent acquisitions by Indian software and back-office firms. Hinduja TMT Ltd. said it would buy U.S. based call center company Source One Communications Inc. for about $8.5 million.



Four Soft Ltd. is buying a privately-held Dutch software firm catering to the freight forwarding and transportation sectors, and Nucleus Software Exports Ltd. paid about $3 million for a quarter of GMAC Financial Services India Ltd., the auto finance operation of General Motors.

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