Mindtree buy adds muscle for larger contracts

By Janaki Krishnan

MUMBAI (Reuters) - Research, development and IT services firm MindTree Ltd sees its latest buy, Aztecsoft, adding muscle to bid for bigger contracts, a senior official said on Monday.

"The combined entity will now break into the Nasscom top 15 list in the Indian IT industry by revenues," MindTree's Chief Financial Officer Rostow Ravanan told Reuters.

"We believe this will allow us to participate in and win large opportunities, some of which were not available to us as a standalone entity. We will now have a large size and a bigger base."

On Friday MindTree signed an agreement to buy 32.57 percent in Aztecsoft at 80 rupees a share from the promoter, e4e Holdings Ltd, valuing it at $90 million.

MindTree made a net profit of $25.7 million on 2007/08 revenues of $191 million, the year Aztecsoft's revenues were about $63 million. After the merger, expected in about 12-14 months, the combined entity will have close to 8,000 employees.

The merger is not expected to affect MindTree's margins in the current financial year and would contribute to earnings per share in the year to March 2010, Ravanan said.

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