Zylog Systems Ltd (ZSL), a Chennai-based technology integrator and business solution provider, has acquired Canadian firm Brainhunter Inc, an IT consulting and engineering staffing services company. Zylog has spent C$35 million (around $32.76 million) for the acquisition, which will help to expand its footprint in Canada.
Private equity firm UTI Ventures has a 7% stake in Zylog Systems. Shares of the company were traded at Rs 336, up by Rs 6.9 or 2.1% at 11:30 am in the BSE.
Brainhunter is engaged in consulting and engineering services in Canada with major presence in government, telecom, banking, financial services and insurance (BFSI), and oil and pipeline verticals, said a Zylog statement. The acquisition came through a bidding process for Brainhunter under the Canadian Creditors Arrangement Act (CCAA) in
which Zylog put in the winning bid.
The acquisition will bring in Zylog’s fold Brainhunter’s ready access to a large talent pool, over 1,400 contractors and more than 400 customers. The deal will also help Zylog save costs on account of offshoring contracts, sourcing of contractors from India for non
government businesses and further reduction in non-billable staff, added the statement.
Speaking on the development, Sudarshan Venkatraman, Chairman and CEO, Zylog states that around 30% of the Brainhunter services rendered are to various agencies and departments of the Federal Government of Canada, and the company sees huge opportunity in the space. “Zylog has been looking to enter Canada for its operations and this acquisition would provide us with the appropriate platform. The target caters to
government departments, BFSI, telecom which are the key focus segments for Zylog, and hence, there is high potential for cross-sell,” added Venkatraman.
Zylog offers a range of IT products and services to its global customers across multiple verticals like banking, insurance, telecom, etc. Its clientele includes SBI, American Express, Standard Chartered Bank, Allahabad Bank, ING Vysya among others.
Its earlier acquisitions include PEQ Consulting, an infrastructure management company in Ohio and Fairfax Consulting, a content management services firm in the US. Prior to that, it acquired Dubai-based Ducont FZ LLC, a leading application provider in internet
and wireless applications space.
Zylog reported net profit of Rs 85 crore for the year ended March 31, 2009 as compared to Rs 82 crore a year ago. Revenue for the last financial year stood at Rs 735 crore as against Rs 606 crore.