MindTree to acquire Indian chip design co.

BANGALORE: MindTree Consulting that is planning its Initial Public Offering (IPO) on February 9, also in the process of acquiring an Indian semiconductor IC design.

Ashok Soota, chairman and MD, of the Bangalore-based MindTree who revealed this today at a press conference, however did not go into the details of the transaction since the company has signed a non-binding agreement that is subject to due diligence.

The company plans to raise $70 (Rs 200 crore) million from the IPO that opens on February 9th and ends on February 14th. Soota said that the money raised would be used in boosting the company’s growth.

“We want to expand our existing service offerings, increase our geographic footprint, create new IP in R&D services and use mergers and acquisitions aggressively to grow,” he said.

The $102 million company has made two acquisitions so far: ASP solutions in 2004 and Linc Software in June 2005.

“We want to acquire to gain complementary capabilities and enter new geographies. However acquisitions are not a substitute for organic growth,” Soota said.

On the organic growth front, the company recently acquired land in Bhubaneshwar for a development center there and is also building facilities in SEZs in Chennai and Bangalore.

On the details of MindTree’s forthcoming IPO, Soota said that the company proposes to offer 5.59 million equity shares of Rs 10 each at a price band of Rs 365 to Rs 425 per equity share through the 100 per cent book building process.

The issue comprises a net issue of 4.9 million equity shares of Rs 10 each to the public, and up to 372,000 equity shares of Rs 10 for subscription by employees and 279,660 shares for business associates.

Of the net issue, 60 per cent is reserved for allotment to institutional buyers of which 5 per cent will be reserved for allotment to mutual funds. Up to 10 per cent will be allotted to non-institutional investors and the remaining 30 per cent to retail investors.

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