The first of these, in the range of $5-10 million, could be completed by December this year either in Europe or UK.
HYDERABAD: Flush with cash and a desire to further consolidate its leadership position in the market, transportation, logistics and supply chain management (SCM) software products company Four Soft Ltd is looking at least two to three acquisitions in these verticals in a year’s time.
The first of these, in the range of $5-10 million, could be completed by December this year either in Europe or UK, Palem Srikant, CEO and managing director, Four Soft, told DNA Money.
“We are talking to a couple of companies and expect to finalise the details before December,” he said, while refusing to name the target companies.
Palem, however, added that while the immediate acquisitions in the transportation and logistics space will be smaller, a larger buy could be expected in the SCM space in about a year’s time.
Four Soft commands a 10-12% share of the global logistics software products market, which makes it one of the biggest in the segment estimated to be $500 million in size currently and growing at around 7% per annum.
The SCM market is more attractive, given its large size — around $2 billion annually — but has more competition with ERP giants like SAP playing a dominant role.
Though a relatively recent entrant into this space, Four Soft has already bagged three major clients including Panasonic, while several more are in the pipeline, Palem said.
“With customers and products in place, we are in a position to take on the competition.”
Last year, Four Soft had acquired DCS Transportation and Logistics Solutions, a UK-headquartered transportation and logistics software solutions major, with operations in the UK, Netherlands, US, France and Germany. It also acquired Singapore based Comex Frontier Pte Ltd. The acquisitions established it as a market leader with a large international client base, including many of the top 20 transportation and logistics companies of the world.
Four Soft currently has a cash-chest of $4 million and is generating a profit of around $1-1.5 million every quarter. It also has $5.5 million in long term debt from ICICI, Palem said, explaining the funding possibilities for the proposed acquisition.
Meanwhile, given the large number of enquiries and demand, the company is also planning to set up a transportation and logistics BPO, either as a subsidiary or in joint venture with another company. The BPO could be operational early next year, Palem averred.
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