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Rediff News  All News  » Business » Four Soft buys out Transaxiom for $10 mn

Four Soft buys out Transaxiom for $10 mn

December 21, 2006 09:13 IST

Four Soft, a global leader in software solutions for transportation and logistics vertical, has entered into an agreement to acquire 100 per cent of the Denmark-based Transaxiom Holding for $10 million (around Rs 45 crore) in a cash-and-stock deal with the payouts happening over the next three years based on performance.

Four Soft CEO & MD Palem Srikant said 60 per cent of the value of the transaction will be paid in cash and the remaining 40 per cent in stock valued at Rs 75 per share.

The merger of the Denmark company would increase the turnover of Four Soft to $50 million per annum. Transaxiom's turnover and net profit last year stood at $7.7 million and and $0.9 million, respectively. Srikant said his company was awaiting commitment from two to three customers to start business process outsourcing operations in logistics.

The company was planning to start BPO operations in the first quarter of the next financial year.

In this regard, it was also talking to a few enterprises, including a Japanese company, for joint venture partnership.

The definitive agreement has been signed between the two companies, and integration will start from January 1. A joint team has been identified to work on various aspects of the integration process. Senior executives of both companies have reiterated their commitment and focus on executing this exercise seamlessly.

With this merger, Four Soft will add a number of players in transportation and logistics to its current customer base. The merger will also augment the company's current domain and technology competence and expand global presence in Scandinavia, Australia and Hong Kong markets.

Kal Gangavarapu, COO, Four Soft, said, "The acquisition of Transaxiom is an integral part of our value strategy of market consolidation and will provide 4S with strategic selling opportunities. Now our customers will derive greater returns from enhanced global footprint, from Australia to Americas, and business service integrated solutions."

Joergen W Nielsen, chairman, Transaxiom, said, "The combined entity will have enhanced capability to deliver integrated products and specialized services globally. In addition, the acquisition is exceptional for the Logistics solution market as the consolidation will create a unique value proposition to the market and reduce the complexity and fragmentation of solutions used by the customers."
BS Reporter in Hyderabad