E-Commerce Deal : Zensar Technologies Acquires Professional Access Group
E-Commerce Deal :Zensar Technologies Acquires Professional Access Group
RPG group firm Zensar Technologies is all set to acquire US based Professionla Access Group from 3i Infotech. Zensar Technologies is seeking to increase its IT services revenue by targeting the retail e-commerce space. This is an all-cash deal which also involves the sale of PA's software development centers in the country. This will push up the contribution of the retail sector to 14% of the company's revenue from its present 10%.
Subba Rao Amarthaluru who is the Group Chief Financial Officer at the RPG Enterprises indicated that this acquisition was aimed for by Zensar along with its existing lines of business via organic as well as inorganic means. While the financial details of the transaction were not revealed, industry watchers indicated that around $50-70 million could have been spent for the deal.
Professional Access Group is one of the biggest partners for Oracle's ATG web and Endeca search platforms and it has a revenue of over $38 million. The firm has branches in the US, the UK, Latin America, West Asia, India and Africa. The company has customers such as Liverpool, Best Buy, Vodafone as well as Nintendo and John Lewis as customers.
The deal will add to Zensar's earnings from this financial year itself according to the Chairman of the group Harsh Goenka. 800 employees of the Professional Access group will now join Zensar's 22,000 workforce following the completion of the deal.
Goenka indicated this during the media news conference. 3i Infotech is currently debt ridden and it has indicated that “These sales are in line with the group strategy to sell its non-core assets / investments and use the additional cash generated from such sale to de-leverage its balance sheet and for business purpose.”
3i Infotech acquired Professional Access Group in the year 2007. The founders of PA are Babu Venkatesh and Ashu Chahal. They will continue to take care of the firm which is now 100% subsidiary of the acquirer. The final advisor for this deal was ICICI Securities while its legal advisors were Nishith Desai Associates and Stahl Cowen Crowley Addis.
Professional Access Software Development Private Limited is into IT services with specialisation in e-commerce domain from 3i Infotech Limited. The US owned subsidiary of Zensar Technologies named Zensar Technologies Inc. has gained 100% equity shares of Professional Access Limited. Following this deal, the NY based PA will be a completely owned subsidiary of Zensar Technologies Inc. This deal is part of 3i Infotech's attempt to sell off its non-core assets and use additional cash from this sale for de-leveraging its balance sheet as well as its business purposes.
