Virinchi Tech buys KSoft in stock-cash deal

HYDERABAD: Virinchi Technologies Ltd, a web-enabled enterprise-wide solutions provider has entered into an agreement to acquire 100% of KSoft Systems Inc., a $3.7 million company in a stock-cash deal for a total consideration of $2,660,000.

KSoft is a New Jersey US-based company with experience and expertise in packaged product

implementation.

"Virinchi's acquisition of KSoft brings together companies with complementary strengths that will deliver greater value to customers while increasing KSoft's ability to enhance its services to its clients and add more clients," stated Praveen Kondai, founder & CEO of KSoft.

Viswanath Kompella, chairman and managing director, Virinchi, said, "The acquisition, the first of its kind in the Indian IT industry landscape, is a healthy blend of stock and cash deal. Virinchi's current market capitalization is at 4.4 times its 2004-05 revenues (4.4 Million USD) while KSoft is being acquired at 0.72 times its 2004 Revenues ( 3.7 Million USD) and 55% of the Acquisition consideration is being paid through stock with just 7.3% dilution and 45% of the payment

made in cash through 5.3% dilution, thus giving huge value addition to current share holders.”

The acquisition price includes real estate property owned by KSoft in New Jersey valued at $250,000. The acquisition would be completed in the third quarter of 2005. The acquisition has been approved by the boards of directors of both the companies and is subject to various closing conditions.