INDIA BUSINESS WORLD - OCTOBER 2005
THE MONTH THAT WAS

TCS BUYS AUSSIE BANK SOFTWARE CO FOR $26M

TATA Consultancy Services today announced the acquisition of Financial Network Services (FNS) of Australia, a core banking solutions vendor for approximately $26 million. TCS bought the stakes owned by Macquarie Bank and other promoters in an all-cash deal.
FNS has more than 100 banks as customers and is seen as a major provider of core banking solution which is able to meet the requirements of large banks. While the banking solution has been very successful, FNS has not been making profits due to the large investment in marketing required for software banking companies.

The scaleability of FNS' solution can be determined from the fact that the largest bank in India - State Bank of India - chose it for its 10,000 branches. Most of FNS' customers are banks requiring scaleable solution. FNS won the SBI contract against competition from i-Flex and Infosys.
"We have been working as implementation partner for FNS and understand the product well. We felt that the current valuation of the company with revenues of A$ 29 million, was attractive and it gives us entry into the core banking software product area," TCS CFO S Mahalingam said.
FNS is a pure software products company as unlike i-flex , the company does not carry out implementation or provides any other services. All the revenues of the company come from product sales and license fees. TCS has its own range of banking software products which addresses wholesale banking and investment banking.