The RPG group has bought Fujitsu's 30 per cent stake in software and BPO services company Zensar Technologies. Though the companies did not disclose the acquisition cost, sources close to the developments said it could be around Rs 170 crore (Rs 1.7 billion).
At Friday's closing price of Rs 242.65, Fujitsu's stake in Zensar is valued at Rs 167.78 crore (Rs 1.68 billion). The deal was signed on Thursday and the formalities could take a couple of months to complete.
RPG Enterprises chairman Harsh Goenka said the acquisition was a "gift" for his father Rama Prasad Goenka on his 78th birthday.
Goenka said Zensar would like to "gallop forward" aiming more than 10 per cent growth over its peers. "We are scaling up presence in the US, Japan and South Africa through organic as well as inorganic growth," he said. Zensar will spend nearly Rs 100 crore (Rs 1 billion) for the recent acquisition of US-based ThoughtDigital.
Zensar has marketing presence in 23 locations in 18 countries.
Pradipta K Mohapatra, president and CEO of the technology businesses of the group, said with the US acquisition, Zensar figured among the world's top 10 players in the e-business practice of Oracle. The group's technology businesses comprise Zensar, RPG Life Sciences and RPG Cables.
Goenka said the company was also aiming at increasing its revenue from retail practice. Its retail clientele includes Merck & Spencer and Landmark in Dubai. "Now, the company generates 15 per cent of its revenue from this rapidly growing sector. We have potential to do better," he added.
Zensar posted a net profit of Rs 34 crore (Rs 340 million) on revenues of Rs 433 crore (Rs 4.33 billion). For the nine months ended December 31, 2006, it enjoyed a net profit of Rs 39.98 crore (Rs 399.8 million) on revenues of Rs 435 crore (Rs 4.35 billion).Both companies had an equal stake in Zensar with 69.15 lakh equity shares each. Fujitsu held a stake in Zensar through two companies - Fujitsu Services, which held 26.25 per cent, and Fujitsu Holdings, which had 2.93 per cent. When the company announced the acquisition of ThoughtDigital, Goenka had said he was looking at opportunities to increase RPG's stake in Zensar. There were also rumours that the ties between the two companies (RPG and Fujitsu) were not well and also that Fujitsu had not been contributing enough to increase Zensar's business.