Chennai-based Megasoft and US-based Boston Communications Group (BCGI) today announced a definitive agreement, whereby Megasoft would acquire the Nasdaq-listed company for around $65 million (around Rs 260 crore) � $3.60 a share � that works out to 83 per cent of the total equity shares of the entity. The offer price includes a premium of 80 per cent compared with the traded value of $2 a share on Saturday.

The two companies are into products and services, including real-time charging, billing, pre-paid products and managed services catering to the wireless telecom space. The members of the BCGI board have also agreed to tender their shares to the offer, according to G V Kumar, managing director and chief executive officer of Megasoft.

Kumar said BCGI would become a 100-per cent subsidiary of Megasoft after the acquisition process was completed. The tender offer is expected to commence on or before August 1, 2007, and will expire on the twentieth business day.

"The acquisition will not only double our revenue, but also offer a great strategic value in terms of access to North American and Latin American markets, besides the big-ticket clients the BCGI has on its rolls," Kumar said. According to him, Megasoft would fund the acquisition solely through internal accruals (about Rs 120 crore) and partly leveraging its long-term assets.

According to Ersin Galieglu, chief operating officer of Boston Communications, the company currently has over 20 tier-1 clients including Sprint and Telephonica. While the standalone revenues of Megasoft this year (January-December) are expected to go up to close to Rs 300 crore from Rs 180 crore last year, BCGI's revenues are expected to slightly come down to $70 million from over $80 million last year, Kumar said. "When combined with the fourth quarter revenues of BCGI, the total revenues of Megasoft this year would be around Rs 390 crore," he said.