Bangalore, Sep 27 (IANS) India's Sonata Software Ltd, a leading IT consulting and software services firm, has acquired a majority stake in TUI InfoTec, a subsidiary of the Germany-based TUI AG, for euro 18 million (Rs.1.06 billion) in an all cash-deal.
To fund the acquisition, the Bangalore-based company would use its cash reserves (Rs.600 million/$12 million) and raise the balance through short-term borrowings and term loans, Sonata managing director B. Ramaswamy told reporters here.
'Of the total transaction, euro 5 million is for the 50.1 percent stake in the euro 10-million paid-up capital of TUI InfoTec and the remaining euro 13 million is towards premium. Post-acquisition, the Hanover firm will operate as our joint venture,' Ramaswamy said.
The joint venture will enable Sonata to enter new markets in Europe. Leveraging the Indian firm's offshore capabilities, TUI InfoTech will offer IT infrastructure management and software services to the European market.
As preferred IT supplier to the euro 20-billion (Rs.1,200-billion) TUI AG group, the joint venture will be the strategic offshore services provider to Europe's leading tourism and shipping group.
'The new joint venture will have the strengths of both companies to pitch for new business in Europe. With one-third cost advantage over other vendors, we will be targeting new customers in the addressable market, estimated to be about euro 25-30 billion in the domain areas of our offerings,' Ramaswamy pointed out.
The Rs.5.1-billion (1 euro=58 rupees) firm expects returns on the investment made in the acquisition over the next six-12 months.