Polaris acquires US software firm

CHENNAI: India's Polaris Software Lab on Monday said it had acquired Data

Inc., a US-based software firm for $21 million.

"We have just signed an MoU today for acquiring the New Jersey-based

Data Inc., which is in the banking, financial services domain," Polaris

chairman Arun Jain told reporters at a news conference.

The deal, priced at $21 million, will be completed through a combination of

cash and a stock swap, he said.

Last year, Data Inc reported revenues of over $9 million and projections for

the current year were at about $14 million, the US company's president Arun

Verma, who was also present at the press conference, said.

Data Inc. has clients in the financial services industry, Verma said.

Polaris' Jain said the acquisition would increase the company's revenue growth

by around 70 to 80 per cent.

The company had said in March that sales for the year ending March, 2001 were

expected to reach about Rs 2.4 billion from the previous year's level of Rs 1.6

billion.

Jain said the purchase of Data Inc. would put some pressure on margins in the

first year of acquisition. "Margins in the US traditionally tend to be

lower. So there would be some dip in terms of total margins, but we expect over

the next 12 months to be able to put it on par with Polaris," he said.

Polaris' shares closed Rs 34.90 down at Rs 1,022 on the Bombay Stock Exchange

on Monday. Total shares traded for the day were at 13,227.

(C) Reuters Limited 2000.