Chennai, June 25

“If you have cash, you are king,” may be a general adage for businesses. But when Mr Partha De Sarkar says it with a triumphant smile, it rings truer now, in the context of a global slowdown. Mr Sarkar, CEO of HTMT Global Solutions, part of the Hinduja Group and an outsourcing solutions provider, is keen to make an acquisition in the current environment when the average company’s prospects seem to be flagging and valuations are at an ebb.

In the city to launch HTMT’s second centre, Mr Sarkar told a press gathering that HTMT would acquire a BPO (business process outsourcing) company in Europe by the end of this fiscal.

It has earmarked around $110 million for the acquisition, which will mark its foray into the continent.

“We have short-listed four companies. We prefer to acquire a company in the UK, because of language affinities. We are interested in a company with revenues of about $50 million,” he said. “With a drop in valuations of companies, this is the right time to make an acquisition,” he said.

Till a few months ago, valuations used to be 9-10 times the operating profit (EBIDTA – earnings before interest, depreciation, tax and amortisation), but it is now 7-8 times. Mergers and acquisitions, in general, have dropped and there is a credit crunch with banks not too keen to fund such activity, he said.

As at March 2008, the company had about Rs 440 crore as cash reserves. For the year ended in that month, it reported revenues of Rs 673 crore.

Mr Sarkar ruled out acquiring BPO operations owned by customers such as big banks or telecom companies, due to over-valuation.

He said, “A captive BPO with revenues of around $150 million is sometimes valued at around $1 billion. Owners of captive units seem to be ambitious,” he said.

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