MUMBAI: After the likes of Fujitsu, EDS and IBM, it is now the turn of another multinational and old India hand, Datacraft, to look for acquisitions in the country.
The Singapore-headquartered network services and solutions firm is hunting for suitable opportunities in India in the domains of security, data centre and storage, and Microsoft technologies. It has a budget of around $40 million for the acquisition.
Datacraft was among the early entrants to India through its joint venture with the RPG group, Datacraft RPG, in 1995. Later, the company bought out the RPG group and the Indian entity became a fully owned subsidiary. However, unlike many of the multinational IT firms with a significant Indian presence, Datacraft is a relatively niche player working as a systems integrator and re-seller for networking majors like Cisco and software firms like Microsoft.
Its revenue for the fiscal ended September 2006 was $482 million. It is part of the larger Dimension Data group, which is about $2 billion in revenues. “As on September 2006, we had cash reserves of $150 million. Our working capital requirements are around $50 million – $60 million, and after the amount set aside for the share buyback we are doing, we have around $40 million – $30 million for acquisitions,” Bill Padfield, CEO, Datacraft Asia Ltd, told ET.
Mr Padfield took over as CEO of Datacraft Asia in 2003 and oversaw its turnaround from a loss-making firm to a profit-making one in 2004. Like many technology firms at that time, Datacraft was also hit by the dotcom bust in 1999-2000.
Its Indian subsidiary is its largest with close to 1000 people and the company has already moved many business processes here, including a global services centre to Bangalore after shutting down centres at Japan, Korea, Singapore and New Zealand. Last year, it also moved some of it back-office work relating to contracts to India.
India is the ideal hunting ground for its acquisitions but rising valuations may also force it evaluates options in countries such as Malaysia, New Zealand, Singapore, Hong Kong, and Indonesia. “Even Vietnam has become attractive since they have joined the WTO. Indian companies have the right business proposition but the valuations are stratospheric.