Glodyne Technoserve Ltd, a BSE-listed, Mumbai-based technology services firm, is acquiring DecisionOne Corporation, a US-based technology infrastructure management services (IMS) company, for $104 million (about Rs 469 crore).
VCCircle broke the story on a deal brewing between Glodyne and DecisionOne on April 13. Glodyne has entered into a definitive agreement with DecisionOne for the deal, which is expecting to close by the end of June this year.
Glodyne, whose FY10 income grew 44% to touch Rs 721 crore, is acquiring DecisionOne, one of the largest and profitable IMS provider in the US with revenue of around $200 million (around Rs 902.47 crore) and EBIDTA margin of of 8.1% in CY09. Glodyne has projected that its revenue would be in the region of Rs 1,675 crore to Rs 1,720 crore in FY11.
Glodyne plans to fund the acquisition through a mix of debt, equity and cash reserves, it said in a statement. Glodyne will get its equity enhanced by allotting shares, under a preferential issue, to private equity funds for approximately $23 million, a company statement said.
According to the earlier VCCircle report, DecisionOne filed for bankruptcy under Chapter 11 in the US court most recently in 2005 (earlier in 2000) following which it undertook a reorganization and restructuring exercise. In 2005, the company completed the sale of call centre operations and also sold off some contract manufacturing assets as part of the restructuring. The company generated cash as well as transferred over 1,000 employees to the buyers, in the process. Till some years back, private equity firm Cerberus Partners LP is understood to have been the largest shareholder in DecisionOne. The current ownership details of DecisionOne could not be ascertained.
Following the transaction, the current CEO of DecisionOne, Neal Bibeau, will continue his service, and will join Glodyne’s executive council, the statement added.
Glodyne believes the acquisition will further strengthen its global reach with a robust onsite-remote IMS delivery model. Globally, the IMS market is pegged at $524 billion. Annand Sarnaaik, chairman & MD, Glodyne Technoserve, said, in the statement, “The acquisition will offer a range of IMS services via a global excellence model. Together, we will be a stronger business partner, delivering customers the broadest, most competitive portfolio of IMS services in the industry.”
Glodyne offers IT services, technology infrastructure management services and consulting services while DecisionOne has over 2,000 professionals under its fold and has clients across retail, healthcare, travel and hospitality, education, original equipment manufacturers (OEMs), and resellers space, in the US and Canada.
Glodyne stocks were traded at Rs 708.45, up by Rs 26.15 or 3.83% at 2:50 pm in the Bombay Stock Exchange today. At the prevailing prices, the company has a market capitalisation of Rs 1,582 crore. Glodybe earlier acquired Broadllyne Technologies Ltd, a Mumbai-based application services provider in the education sector, in July last year.