INDIA BUSINESS WORLD - APRIL 2006
THE MONTH THAT WAS

SUBEX SYSTEMS BUYS UK'S AZURE SOLUTIONS FOR $140 MILLION

THE biggest overseas acquisition by an Indian IT company has come not from the Wipro or Infy but from a Bangalore-based mid-sized IT products company Subex Systems. The telecom software products company on Tuesday announced that it was acquiring UK based telecom products company Azure Solutions for $140 million (Rs 630 crore) in a cash-cum-stock deal.

The cash component of the deal is rather meager at about 2-3% of the deal size with the balance being paid in stocks.    “The small portion of the cash will be paid through our internal accruals while the remaining will be paid through stocks,” Subex chairman Subhash Menon said here on Tuesday.

The acquisition will result in the merger of the two entities and henceforth, Subex Systems will be known as Subex Azure with Mr Menon heading the new entity. The integration process will take around 10 months from June.

Subex will also be making fresh issue of shares which will also include another GDR issue of Rs 13 crore, which will take its current paid-up capital from Rs 23 crore to Rs 36 crore. It had earlier raised $10 million (Rs 45 crore) through a GDR issue.

Subex scrip, which gained almost 25% in the last month, closed at Rs 630.30 on Tuesday, showing a gain of 15.25% against Monday's close of Rs 546.90.

Azure, which was spun off from BT in 2003, is a private company and reported revenues of $31 million (Rs 140 crore) for FY06. It has investees such as New Venture Partners, Doughty Hanson Technology Ventures and Intel Capital .