CalSoft inks deal to pick up 51% in 2 Inatech cos

MUMBAI: Chennai-based California Software (CalSoft) has signed the letter of intent with the Inatech group to acquire 51% controlling stake in the two group firms — Inatech UK and Inatech InfoSolutions, India. The deal envisages initial purchase of shares by the company through a combination of stock and cash.

Inatech’s enterprise valuation stands at Rs 30 crore. With this acquisition, CalSoft expects to gain entry in the UK market through Inatech’s clients and in turn take Inatech’s services to its US clients, S Santhosh, MD & CEO, CalSoft told ET. “We expect to increase our stake to 100% in Inatech by next 3 years,” he added.

Inatech is a specialised Oracle solutions provider with a focus in construction, hi-tech, manufacturing, distribution and the government sector. It has primarily focused on the UK market and continues to work with Oracle’s E-Business suite and new technologies like fusion and mobile applications.

Speaking about the changes on the board of directors for Inatech, Mr Santhosh said that the key personnel on the board continue to run the company after the acquisition. The composition of the board will, however, change with the addition of three members from CalSoft. Inatech will have two representatives on the board.

CalSoft also has plans to increase the employee strength in Inatech by 25-30% from the present 100, after this deal, Mr Santhosh said. CalSoft shares rose 2.53% to close at Rs 87.15 on the BSE on Thursday.

The stock, which reached an intra-day high of Rs 94.50, saw hectic activity with the volume totalling 154,796 shares, almost four times of its two week average volumes of 34,990.

The company also announced that it planned to raise Rs 10 crore through an issue of convertible debentures to financial institutions and corporate bodies. It will also issue on a preferential basis 555,556 equity shares to the promoters of Inatech, it said in a statement on BSE.

Calsoft posted consolidated revenues of Rs 115.4 crore in the year ended March 31, ’06, and achieved consolidated revenues of Rs 36.2 crore in Q1 ended June ’06.