Omnitech looks at overseas acquisition worth USD 15m

In an interview with CNBC-TV18, Atul Hemani, Managing Director of Omnitech Info Solutions, spoke about the company’s acquisition and fund raising plans.
Here is a verbatim transcript of an exclusive interview with Atul Hemani on CNBC-TV18. Also watch the accompanying video.
Q: There is a lot of talk in the market that you zoomed in an overseas acquisition in the size of about USD 20 million. Could you take us through what you are planning?
A: I am glad to announce that our strategy is working absolutely inline with what we had thought precisely last year and where we decided not to pursue the acquisition. Today, we have come with an aggression to acquire companies in cross border as well as within the domestic space. On our cross border layer we are almost at an end where we are going to sign the term sheet before this month ends. We are hopeful to close the deal before this financial year end.
Q: Can you give us some more details on this cross border acquisition? What is the potential size of it? What are you looking to pay and is it a profitable company?
A: As per our strategy, we are always looking at cash profit companies. We are looking at Plan A and Plan B. Plan A company is around USD 25 million, which is out of Benelux Region. Plan B is a company which we had short listed last year and is based out of US. It is around USD 15 million. The earnings before interest, taxes, depreciation and amortization (EBITDA) of both the companies is positive. They have managed to sustain positive EBITDA during the last economy turmoil as well. We are hopeful to close the deal with one of them.
Q: I believe in order to fund it you would look at both internal accruals and raising of funds. How will you get that split? How much would be from internal and how much would you raise additionally?
A: We currently have internal accruals in the tune of around USD 3-3.5 million. We are looking to fund our acquisitions for domestic as well as in international market space. We are also pioneer’s in the area of disaster recovery and business continuity services where we setup India’s first disaster recovery center. We will continue to open many more such centers across India. Hence, we are looking at fund raising exercise to meet up with our merger and acquisition (M&A) and our expansion plan in terms of the technology center setup. We are looking at some part of the funding to be done through internal accruals. We have already got internal approval from the executive committee and the board where we have a node of USD 50 million. However, looking at our current requirement, we would be in a position to look at raising the fund in the case of around USD 20-25 million to meet our current needs.
Q: Would it be through global depository receipt (GDR) or through a qualified institutional placement (QIP)? By when will you need to do that?
A: We would be doing it before the financial year end. We have just begun the process. Our financial team is working on it. We are exploring various options including GDR, QIP and debt route. With market condition getting better, we have much larger option of selecting the option which is most appropriate and more suitable for us.