Chennai-based Helios & Matheson Information Technology Ltd on Tuesday said it has acquired two companies, Maruthi Info Tech Inc, USA and Jayamurthi Software Systems, Chennai, for a cash payment of $7.5 million.
Announcing the deal here, the company's managing director Muralikrishna G.K said Helios & Matheson plans to acquire three more companies in 12-24 months period, an aggressive strategy to increase its revenues to $100 million by 2006 from the present $40 million.
The company is also planning to attain a critical mass of 2000 employees by 2006, up from the present 500 employees.
Maruthi Info Tech is a $5 million company with a strong presence in healthcare and insurance space while Jayamurthi Software is the offshore arm of Maruthi having revenues of $1.2 million.
"The acquisition will give us crucial penetration into the recession-proof healthcare sector," Muralikrishna told a press conference in Chennai.
Helios & Matheson, which is into banking and insurance solutions, will pay 70 per cent of the acquisition amount now and the remaining 30 per cent amount will be paid over a two-year period ending August 2006, he said.
This is the fourth acquisition by Helios & Matheson in a span of three years.
In 2001, the company had acquired the Laxmi Group Inc of USA and Bangalore-based SystemLogic Solutions Ltd for $2 million.
Maruthi Info Tech and Jayamurthi Software Systems employ 20 and 55 people, respectively, and the two firms will continue as wholly owned subsidiaries of Helios & Matheson for the next couple of years.
"We are excited about the acquisition. Healthcare is a very important vertical for us and Maruthi's clients are market leaders in this space," V Ramachandiran, chairman, Helios & Matheson, said.
On future acquisition plans, he said that Helios & Matheson was in advanced stages of negotiations for acquiring one more company and the deal could be clinched in the coming months.
Two more acquisitions would be made in the next fiscal, Ramachandiran said.
As part of its expansion plans, Helios & Matheson also plans to acquire a 30-acre land at Mahindra City, on the outskirts of Chennai, to establish its new development centre.
Helios & Matheson, which announced a 1:1 bonus issue of shares early this month, hopes to maintain an earnings per share of Rs 16 this fiscal on the expanded equity base.
