General Atlantic-Backed Infotech Enterprises Plans to Buy European Rival
Stock Chart for Infotech Enterprises Ltd (INFTC)
Infotech Enterprises Ltd., an Indian software services provider partly owned by General Atlantic LLC, plans to buy a rival in North America or Europe to add clients.
“We see equal demand from both the regions,” B.V.R. Mohan Reddy, chairman and managing director, said in an e-mail interview, without elaborating. The Hyderabad-based company, which acquired Paragould, Arkansas-based Wellsco Inc. in August, plans to buy an engineering services provider, Reddy said.
Two purchases, including the acquisition of Daxcon Engineering Inc. in January, helped the company boost sales by 25 percent in the three months ended Sept. 30. The buyouts will help Infotech maintain revenue growth in the next two years, according to Angel Broking Ltd.
“IEL is witnessing deal discussions, which are larger in size and typically demanding 100-200 people instead of 30-40 billable resources a few quarters back,” Srishti Anand, an analyst at Angel Broking, wrote on a October 14 report.
Infotech’s shares, which have gained 2.1 percent compared with a 16 percent increase in the Bombay Stock Exchange’s benchmark Sensitive Index, fell 0.4 percent to 156.7 rupees at 12:28 p.m. in Mumbai.
Some of the company’s new projects from clients including Hamilton Sundstrand Corp. and Westinghouse Electric Co., are expected to yield “strong” revenue for Infotech, according to Anand, who has a “buy” recommendation on the stock.
Revenue is forecast to grow 25.7 percent to 1.2 billion rupees ($26.7 million) this fiscal year, Reddy said. North America accounts for 55 percent of the sales while Europe contributes 37.5 percent.
Infotech is 14.7 percent owned by private equity firm General Atlantic, according to data compiled by Bloomberg.
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