Subex Systems acquires US company

BANGALORE: Bangalore-based Subex Systems Ltd. has acquired IV Generation, Inc. of USA for $6.713 million. IV Generation provides turnkey project development to various US telecom companies. 95 per cent of the cost of the acquisition has been in cash, which was raised recently through preferential allotment by Subex.

IV Generation, now renamed as Subex Technologies, Inc., will be a wholly-owned subsidiary of Subex Systems Ltd. Speaking to the press here, Subex Systems managing director Subash Menon said that the three principals (promoters) of IV Generation would join Subex Technologies as vice presidents for a period of three years. IV Generation had posted revenues of $6 million during the past year.

Giving the rationale of the acquisition, Mr Menon said that it would provide an opportunity to leverage contacts and grow. "We will have greater access to telecommunication companies for software services and business,’’ he added. According to him, while IV Generation only has onsite projects, Subex has the experience of offshore services too, which will add value to the acquisition.

Answering a question, Mr Menon said that the projected revenues of Subex Technologies for 2000 was about $7.5 million through addition to existing business. "It will be much more if we consider the plans for getting more business following the acquisition," he added.

Meanwhile, Subex Systems announced the results for the third quarter ending December 31, 1999. Revenues for the nine month period ending December 31, 1999 has touched Rs 17.15 crore, while net profit was Rs 2.86 crore. The annualised earning per share is Rs 13.31.