Tracmail, SAM profitable buys: HOV Services

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Acquisition adds 900 seats to the capacities of HOV Services. By FY08, the consolidation process will be completed and contribute 35% towards revenues.

MD at HOV Services , Sunil Rajadhyaksha says, they are profitable companies and that they will soon be creating revenues via them.

Excerpts from CNBC-TV18's exclusive interview with Sunil Rajadhyaksha:
    
Q: What is the deal exactly and how much of both companies have you acquired and what do they do?

A: We are acquiring about 30% and full management control in these companies, which will add about 900 seats to our present capacity; so 900 seems to translate into about 1,800 people in next year.

These are BPO companies, which have brand name customers, majority of which are Fortune-250 clients.

Q: How much would it mean in terms of revenue addition and when do you see revenues actually kicking-in from both these companies?

A: The revenues will start kicking in from FY08 and add about 35% to the topline.

Q: How have you gone about financing for these acquisitions? Did you have to raise money?

A: We are going to finance it through our IPO proceeds.

Q: When will these acquisitions be completed?

A: These acquisitions will be complete after the shareholders approve them.

Q: When could we see that?

A: By 27th January.

Q: Tell me about the financials of both these companies? Are they revenue-making firms?

A: All of them are profitable companies and we will be adding additional revenues soon to these companies. We are leveraging our expertise to increase the profitability.

Q: You said that it is going to lead to an access to Fortune-250 clients. How many are there and what is the amount of revenues that you expect from them?                

A: There are about 5 Fortune-250 clients with these companies. I won't be able to reveal the exact numbers but it may add about 35% to HOV Services' topline.

GFX:
HOV SERVICES
-Acquires 30% in Tracmail, SAM Holding for $3.74 m
-Deal expected to increase FY08 revenue by $16.7 m
-Also has option to buy remaining 70%
-Tracmail has over 450 employees
SAM's clients include major bank, telecom cos
-Currently, HOV Svcs has 410 seats in Pune & US
Acquisitions will bring an additional capacity of 900 seats
Acquisition will give access to Fortune 250 clients