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GlobalLogic closes in on $40 m acquisition

New Delhi: GlobalLogic Inc, a product development outsourcing company, said it has renewed its listing plans with improvements in capital markets and is also in advanced stages to acquire a $40 million technology firm.

“We are thinking in the timeframe of 12-15 months, which will be a US listing as we can get slightly better valuations there. But we are not under any pressure to raise funds, as we already have too many people interested in investing in our company,” Peter Harrison, chief executive, GlobalLogic, told DNA Money.

The company was planning to go public by the end of 2008, but the global slowdown deferred its plans. The privately-held firm is currently generates sales of over $100 million, and grew 15% in 2009 calendar year.

It recently offloaded ‘single-digit stake’ to one of the largest global investment banks. The company refused to provide details on valuation, but said it would choose an investment banker by June for the IPO.

“In the third quarter we grew at 60% on annualised basis, the reason being, in the first half many companies put their expansion on hold, but towards the latter half that business started to trickle over,” Harrison said.
The company generates about 10% of its sales in India, mostly from the telecom sector, and has about 50 clients in the region. It is also looking to acquire firms in India.
“We are in fairly advanced stages of negotiation with 6-7 target companies, three of them in India, so I would be very surprised if we do not do something substantial this year. These companies are into R&D in verticals such as telecom, media and data services,” Harrison said.
The target companies have an employee base of about 300-400 and GlobalLogic would use internal accruals from cash reserve to fund the deal, which will lead up to its public offering.
“One of the companies that we have an offer on is $40 million range, and other firms are in the range of $10-$50 million. Valuations are more realistic now,” he said.
GlobalLogic recently announced acquisition of Cubika, a prominent Argentine company specialising in software development.
The company has total workforce of 3,300 including 1,600 employees in India and is looking ramp it up by in 2010.