R Systems set to buy Japanese software co

MUMBAI: Delhi-based software product development company R Systems is looking to acquire a Tokyo-based software product development company. “After our recent acquisition of US based WebConverse, we are now looking at Japan to expand our operations and hope to seal the deal within the next six months,” a top company official told ET. The Japanese company has revenues of nearly $15m.

Rekhi Singh, chief executive officer, R Systems said the company is looking to acquire companies in Singapore and India. “We are looking at acquiring companies with revenues of $2-15m in the banking and financial solutions as well as product development sector,” Mr Singh added.

R Systems is into product development lifecycle and by way of these acquisitions it would look to add to its existing range of services in the banking and supply chain development, Mr Singh said.

The company has, in the past, acquired Pune-based Indus Software and Singapore-based ECNet, in addition to raising close to Rs 100 crore through a public offering.

The company is also in the process of integrating its new acquisition, WebConverse, with its technical support division in Noida. “WebConverse already has 25 employees in it Hyderabad offshore office, we would be adding to the headcount by nearly 40 new recruits.

WebConverse should become accretive to R System’s revenues by next year,” Mr Singh said.
“The company expects to earn nearly $7-8m in revenues from its new technical support division. This should help us increase our overall profits by $0.8m in FY07,” Mr Singh added. The company also has plans to shift WebConverse’s facilities in Hyderabad to Delhi, Mr Singh said.

In August ’06, the company completed the acquisition of WebConverse for $10.7m inclusive of earn-out payments.
WebConverse is a technical support company with operations in Salt Lake City serving the high technology sector with special focus on the growing mobile applications market. The company had revenues of $5.1m in the previous year.