Aptech-SSI Merger: Hidden Meanings

BANGALORE: With one merger down, that of GTL and Redington, the dynamics of the second is unveiling. And it is looking sound on paper at least. The Aptech-SSI combine, if sails through the famed integration acid test, then stands to challenge the training monolith NIIT on its own ground. It will also mark the emergence of another software services player in the Indian market.

When Aptech spun off its software services business, Hexaware Limited, as a separate entity and sold its stake to SSI, question were raised about the future of the brand. Three months in to the integration with SSI Ltd, Aptech is buying the education business of SSI to make a stronger brand and offering.

While SSI is a major player in courses related to emerging technologies such as networking, e-business, client-server technologies and bioinformatics, Aptech enjoys a significant share in the market for long-term courses. Aptech has also a strong foothold in overseas market and has tie up with major universities to certify its courses.

In its bid to buy over the education business of SSI, Aptech is also inviting additional investors both domestic and overseas and raising its authorized share capital from Rs 20 crore to Rs 60 crore. This move would also enable Aptech to make a few more acquisitions apart from SSI and sketch out firm expansion plans.

On a broad outlay the combine would make Aptech boast of 3,200 plus centers across the globe as against 2,400 odd centers of NIIT. The combined global revenue of the two companies would also bring it on par with its arch-rival, so would the market share. What is to be seen is, which brand would attract more crowds considering the entire IT training industry in on a dip.

Now the question has reversed, what would happen to the SSI brand? Would it go in for a major revamp or remain the same? Aptech has strong brands under its Global IT Education umbrella, Aptech Computer Education, Aptech International, Asset International and Aptech Plus. Would SSI brand be merged as one of the courses or another one of the brands? It is more likely to be kept as a brand as its still pulls the business for its courses.

With the education business sold off to Aptech, SSI now has all the time to focus and concentrate on its software services business, SSI Technologies, which is witnessing a healthy growth. Started off as a small time division in May 1999, primarily to provide live projects to it students, today boasts of a large team of professionals spread across India and US.

The division registered growth through the inorganic model with the acquisition of US based Indigo International Inc in August 1999, formed a joint venture with Nasdaq Global Holdings to form IndigoMarkets in January 2000 and acquired US based AlbionOrion Company LLC. With the integration of Aptech sailing through, the market will witness the emergence of two strong brands in its own streams, Aptech for education and SSI for services.