Software solutions provider, SoftPro Systems Ltd, will acquire 100% of South African software solutions provider Cura Risk Management Software Ltd in an all cash deal for $19 million. The company has entered into definitive agreements with the shareholders of Cura for its acquisition. The acquisition is expected to close by the end of this month. The board of SoftPro has approved the deal, the company said in a filling to the Bombay Stock Exchange (BSE).
Cura Risk Management Software (Proprietary) Ltd is a leading provider of integrated software solutions in South Africa. SoftPro provides various solutions like application software development and technology integration, ERP, business intelligence, enterprise portals and e-learning solutions.
With the acquisition, SoftPro expects its revenues to grow six times to more than Rs 60 crore by March 2010. The acquisition will also establish SoftPro as a global player in the GRC (governance, risk and compliance) space, a release said.
According to a report in DNA Money, SoftPro plans to raise funds in the debt-equity ratio of 80:20 to fund the acquisition. The company plans to raise Rs 53 crore immediately by issuing equity and warrants. The promoters and associates of SoftPro will be given a preferential offer.
The company’s current equity base of Rs 6 crore is expected to go up to Rs 9.49 crore after the preferential issue. Bala Reddy, SoftPro chairman and managing director, currently holds a 46% stake in the company, which will get reduced to 41% after the equity dilution, the report says.
Cura provides software solutions to the GRC space globally. The company has offices in South Africa, USA, UK and Australia. It also operates through exclusive distributors in 16 countries in Asia and South America and has a 75% market share in South Africa.
Ernst and Young was the exclusive financial advisor to SoftPro for this transaction.
SoftPro was established in 1994. In April 2008, Bala Reddy acquired a majority stake in the company with a view to turn it around. The company has a development center in Hyderabad and is in the process of establishing its second development center in Visakhapatnam. It is listed on BSE and the National Stock Exchange (NSE).
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