L&T Infotech eyes cos worth $150-200m for synergy

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L&T Infotech eyes cos worth $150-200m for synergy

YM Deosthalee, Whole-Time Director and CFO of Larsen & Toubro says there is a possibility of looking at any opportunity for a company which is very synergetic to what L&T Infotech does.

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Q: We understand that you all did some road shows for L&T IT a few weeks back. What is your game plan going forward with L&T IT? Is it to discover valuation so that you can merge it with some other company or buy up some other company after the Stayam experiment or attempt? Will you be looking at other smaller companies like Patni? What is your intention with L&T IT and the purpose of discovering valuations?
A: I don't know from where you got this information that we did some road shows. We did not do any road shows for L&T Infotech. L&T InfoTech along with the engineering services business, which is housed in the parent company, today is about half a billion dollars, which is probably in the tier II segment today in the information technology business.

We definitely need to reach the billion dollar mark at the earliest because that is the critical mass which is required for you to be called for bigger jobs, for you to be invited for bids for larger contracts. So that is very critical.

We thought that Satyam was an extremely good transaction for us and therefore we submitted a bid. It is a different matter that we did not succeed. So what is required to be done is, organically or inorganically, this company needs to go to that billion dollar mark at the earliest. Otherwise it will be difficult for this company to grow on a sustainable basis with robust profitability and bottomline for value to be created for our shareholders. So that is what we need to achieve.

Whether we will do one acquisition or two acquisitions? That is something, which we haven't finalized but there are possibilities. But one thing I want to make abundantly clear is that L&T Infotech is not at all looking at Patni or we have not written to them.

But there could be some synergetic options. There is a possibility that if we come across any opportunity for a company with USD 150-200 million, which is very synergetic to what L&T does, we will look at that because ultimately growth is very important for this company.