Wednesday, July 09, 2003
Hughes Software Systems (HSS) has announced the acquisition
of the Bangalore-based Tenet Technologies in an all-cash deal
worth Rs 18 crore. The buyout will be subject to regulatory
approvals, after which Tenet will become a wholly owned subsidiary
of HSS. Following the buyout, HSS expects revenues from Japan
to double in the next couple of years. The company got about
8 per cent of its revenues from Japan in the last fiscal.
Arun Kumar, president and managing director of Hughes Software,
said, "The deal will extend our reach and understanding
of the Japanese market, which will help us significantly enhance
our market share in that region." The acquisition will
positively impact both top line and bottomline. Rajendra K
Misra, CEO and managing director, Tenet Technologies, said,
"Both the companies have synergistic offerings, address
similar customer segments and make a good cultural fit. We
are very happy to integrate ourselves into Hughes Software
family". Misra is committed to continue with the company
for the next three years. "The acquisition of Tenet's
customer base coupled with HSS' scale and proven global delivery
capabilities will provide a stronger market presence,"
Manorajan Mohapatra, executive vice-president and chief operating
officer of HSS, said. HSS, which specialises in convergent
network software, has signed a definite share purchase agreement
with shareholders of Tenet as part of the takeover. The leading
communications software company hopes the buyout will help
it significantly increase its presence in Japan. According
to Mohapatra, HSS has been looking at various options to reduce
its over dependence on the US market and the acquisition has
been a part of it. "We are expecting revenues from the
US to come down to 40-45 per cent of our total revenue from
about 65 per cent. Geographical diversification is one of
the options we had. This acquisition is a part of it,"
Mohapatra said adding the company expects a positive impact
on its revenue as well as profits from the acquisition.
Set up in 1996, Tenet, which has Citibank as one of its investors,
designs, develops and offers product realisation services
for 3G and IP network software services. It has 95 employees,
a development centre in Bangalore and a sales and support
presence in Japan through a wholly owned
subsidiary.<
Last updated : February 2, 2004
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