Mumbai-based Information Technology (IT) and Knowledge Processing Outsourcing (KPO) company Datamatics Global Services Limited is in talks with two different foreign companies for inorganic growth, a top company official told ET. The moves will help the company grow faster, he believes.
"We want to expand. Through mergers and acquisitions, it would be faster. We are aggressively pushing for inorganic expansion. Companies that have taken inorganic route have grown many fold in past decade," Lalit Kanodia, chairman of Datamatics Global Services Limited told ET. It is talks with an American and a European company for M&A.
Datamatics had acquired Ahmedabad-based Cignex Global Holding Corporation and Bengaluru-based Vista Infosystems in 2011. "So far, funding for acquisition has come from internal accruals. For future acquisition, we may resort to debt or preferential allotment of shares," said Kanodia. The company may also raise funds for the likely acquisitions, that are estimated at around $18 million.
BSE-listed Datamatics offers finance & accounting services, information management, IT consulting, IT services, engineering & embedded services, e-publishing services, research & analytics, resource augmentation, smart document processing, billing & payment solutions, and e-retail solutions.
The company is bullish on Cignex, an open source solutions company. In the current fiscal it is likely to touch a revenue of Rs 170 crore and is expected to earn Rs 500 crore within three years. "Economic conditions are very difficult in western countries so they are looking at open source solutions to reduce the costs. We expect 73% growth in open source business in the current fiscal," he added.
Datamatics had a consolidated revenue of Rs 451.9 crore in the fiscal 2011-12. It is expecting about 23% growth in revenues in 2012-13. It is also looking at e-retail, e-publishing and analytics as high growth areas.