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Saturday, September 23, 2006

Applabs to consider IPO on reaching revenues of $100mn

Unlisted Indian software testing company Applabs Technologies said on Wednesday that it had acquired UK-based IS Integration for USD 37 million, reports DNA.

"This acquisition gives us the size to consolidate and become a significant player in our segment," chief executive officer Sashi Reddy said.

IS Integration's chief executive Clive Grummett said the deal would give it a wider reach as its operations were currently restricted to the UK IS Integration offers business software testing consultancy services.

The deal was funded by USD 10 million from private equity fund Sequoia Capital India, USD 12 million was raised as debt from UTI Bank, Singapore while the remaining payment was made in stock.

Sequoia has so far made a total investment of USD 17 million in Applabs.

A public offering to Indian investors would be considered by Applabs only after it reached revenues of USD 100 million, which is expected to happen in the next 8-9 months.

"We should be able to think about an IPO in the summer of 2007," Reddy said.

The company expects revenues in the current fiscal year to March 2007 - including from IS Integration - to touch USD 75 million, while net profit is expected to be USD 8 million, Reddy said.

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