DSQ Software plans preferential allotment

By : |March 1, 2001 0

CHENNAI: DSQ Software Ltd. said on Wednesday it received shareholder approval
for a preferential issue of up to 10 million shares to be used to acquire
software companies in the United States and India.

Managing director Dinesh Dalmia told reporters after a shareholders meeting
that the company planned to use the new equity – to be allotted at a price of
about Rs 500 per share – in a series of cash-cum-stock acquisition deals.

Dalmia said DSQ Software planned to spend a total of up to Rs 15 billion
($322.3 million) this year to acquire a clutch of software firms to become one
of the five largest Indian software companies by revenue.

"Our aim is to push our company among the top five Indian software firms
from its current position among the top 10. We cannot achieve that only by
organic growth and so we got our shareholders’ nod for the acquisitions,"
Dalmia said. He said the firm hoped to finalize deals to acquire two to three
US-based software services companies in the next seven to 10 days.

"These firms are typically of $30 million to $100 million in size and
serving niche areas for Fortune 100 clients, making profits and having no debts
and our aim is to buy them through cash-cum-stock deals, increase the engagement
size and move the projects offshore."

Dalmia said the acquisitions would help DSQ achieve sales of Rs10 billion
($214.87 million) in calendar 2001. "We have now benchmarked ourselves
against some of the top Indian software firms such as Infosys, Wipro and Satyam
and this strategy of ours will help boost our margins also significantly."

San Vision still in focus
Dalmia said that e-commerce solutions provider San Vision Technology Inc was
still the firm’s most preferred choice among the four to five US firms that it
was eyeing for acquisition. In December, DSQ said it was renegotiating the price
for buying San Vision, from the $30 million in stock it had said it would spend
when it originally announced the deal in July.

"San Vision is still our most preferred choice today and we are still
finalizing the valuations for the purchases, where we are looking at firms in
places like San Jose or New York where we already have a base," he added.

(C) Reuters Limited 2001.

No Comments so fars

Jump into a conversation

No Comments Yet!

You can be the one to start a conversation.