India's Applabs buys UK firm for $37 mln

MUMBAI: Unlisted Indian software testing company Applabs Technologies Pvt. Ltd. said on Wednesday it had acquired UK-based IS Integration for $37 million.   

"This acquisition gives us the size to consolidate and become a significant player in our segment," Chief Executive Officer Sashi Reddy said.   

IS Integration's Chief Executive Clive Grummett said the deal would give it a wider reach as its operations were currently restricted to the UK IS Integration offers business software testing consultancy services.   

The deal was funded by $10 million from private equity fund Sequoia Capital India, $12 million was raised as debt from UTI Bank, Singapore while the remaining payment was made in stock.   

Sequoia has so far made a total investment of $17 million in Applabs.   

A public offering to Indian investors would be considered by Applabs only after it reached revenues of $100 million, which is expected to happen in the next 8-9 months.

"We should be able to think about an IPO in the summer of 2007," Reddy said.   

The company expects revenues in the current fiscal year to March 2007 -- including from IS Integration - to touch $75 million, while net profit is expected to be $8 million, Reddy said.