The Chennai-based Helios & Matheson, a healthcare-focused IT services company, plans to acquire a "pure-play" American or European company shortly.
"We are sitting on $40 million cash (a little over Rs 180 crore (Rs 1.80 billion) that includes accruals). Our cash position as on September 30, 2006 was Rs 141.87 crore (Rs 1.418 billion). We want to acquire either an American or European company, which has no offshore linkage," said G K Muralikrishna, managing director.
The company plans to touch around Rs 400 crore (Rs 4 billion) by financial year 2007 (around Rs 237 crore -- Rs 2.37 billion -- consolidated revenue in 2006) made a foreign currency convertible bonds (FCCB) placement, completed this July, for $20 million.
"Our FCCB placement was a success and the proceeds will be used for our strategic acquisitions and capital investment," said Muralikrishna.
The company plans to set up an offshore development centre in Coimbatore at an investment of $6 million, in a year. It already has a presence in Chennai and Bangalore.
Around 37 per cent of the company's 2006 revenues came from its healthcare business. Worldwide, this is a very profitable segment. IT spending in the vertical markets will exceed $2.2 trillion in 2006.
Financial services and healthcare industries will lead the IT five-year spending growth, while government, healthcare and utilities are the fastest-growing global markets in 2006, according to Gartner.
"We target around 50 per cent revenues from healthcare segment in two years," says Muralikrishna.
Earlier this year, the company acquired Tact Inc,its fourth acquisition, which will give the company a niche expertise in the life sciences domain, offering image interpretation, data analysis, clinical trials and pharmaceutical research.
Tact will soon be renamed as 'Helois Matheson North America.'
The US market contributed 71 per cent revenues. The company is spanning out to markets in Europe and Asia-Pacific. Around 9.5 per cent of its total revenues come from one single client while 38.6 per cent from its top five clients.
The sore point with the company, though, is the definitive share purchase agreement (SPA) that it signed in May 2005 to acquire 100 per cent equity in three Vmoksha entities based in Bangalore, Singapore and the US.
Vmoskha is demanding for Rs 250 crore (Rs 2.50 billion) by way of damages including "mental agony". "The matter is in the courts," said Muralikrishna.
