iGATE Global Solutions agreed to acquire the information technology solutions and services business of IdeaSpace Solutions Ltd.
The business will come to iGATE Global for a cash consideration of Rs 7.7 crore (approximately $1.7 million). The acquisition will add over 170 employees, many of whom are specialists in banking technology and operations.
IdeaSpace currently manages the IT services for ING Vysya Bank. Phaneesh Murthy, chief executive officer, iGATE Global Solutions, said, "iGATE Global is being built as the first fully integrated technology and operations company, and the acquisition of IdeaSpace considerably strengthens our capability in the financial services space."
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iGATE Global has also entered into a strategic alliance with the US-based Concours Group. Concours integrates research, education, and consulting for its clients, which include 300 of the Global 1000.
The transaction will involve an investment of approximately $1.8 million into Concours, of which $100,000 has already been invested. iGATE Global registered a one-time charge of Rs 2.69 crore (Rs 26.9 million) towards acquisition-related expenses.
During the quarter, iGATE Global set up a joint venture, SAG India, with Software AG to develop user applications to complement its main server software business.
iGATE's investment to date in this venture is Rs 78 lakh (Rs 7.8 million). iGATE Global enables clients to optimise their business through a combination of process investment strategies, technology leverage and business process outsourcing and provisioning. The Company has been assessed at SEI-CMM Level 5, follows Six Sigma methodologies.
Headquartered in Bangalore, iGATE Global is present in 12 countries and maintains development centres in the US, UK, Canada, China, Malaysia, and India. The company is a subsidiary of iGATE Corporation (Nasdaq: IGTE), a US-headquartered firm founded in 1986.
Ashok Trivedi has been appointed chairman and Sunil Wadhwani has been appointed vice chairman of iGate Global.
Q2 net plummets 90%: iGATE Global posted a net profit of Rs 64 lakh (Rs 6.4 million) for the quarter ended September 2003, down from Rs 6.4 crore (Rs 64 million) in the corresponding period of last year. Turnover was up 61 per cent to Rs 145 crore (Rs 1.45 billion).
Phaneesh Murthy, CEO, iGATE, said: "The net income will be under pressure for the next two quarters as a result of acquisitions, restructuring and higher expenses without corresponding revenues."
