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MindTree to acquire 7Strata

DNBAN23802 | 4/23/2010 | Author : Praveena Sharma | WC :403

The deal will enhance the vendor’s remote infrastructure management capability

MindTree Ltd, mid-tier information technology services company, said on Thursday it has entered into a definitive agreement with Chennai-based remote infrastructure management (RIM) service provider 7Strata to acquire its business in a cash deal of Rs 7.2 crore.
This acquisition has come in less than six months of its buying of Kyocera Wireless India and fifth acquisition since MindTree’s inception over a decade back.
It includes taking over 7Strata’s 90 people, 12 customers and IPs.
Parthasarathy N S, president and CEO — independent testing and IMTS - at MindTree, said the asset-purchase pact that includes proprietary infrastructure management software platform - Rapid - will boost the company’s growth in the RIM segment, which is growing at fastest rate among all service offerings by IT offshoring companies.
“More than the size of the RIM market, it is the rate at which it is growing that is exciting. RIM offshoring, which is fairly a new service segment, is expected to grow at 20-25% every year in the next few years,” he said.
MindTree currently has around 400 people out of its 8,100 employee strength working on RIM services. In the third quarter ended December 31, 2009, the service contributed around 4% of the company’s total revenues.
Parthasarathy said the ITIL-compliant platform of 7Strata will enable MindTree to give better automation and remote desktop management services to its Indian and global customers.
“More than revenue growth prospects, it is acquisition of the tool (Rapid) that is actually more important for us. It will help our customers save money and improve service levels by having an automated and integrated tool to manage IT operation processes,” he said. Out of the 12 customers acquired from 7Strata, 10 are from India and two from Middle East.
The acquisition will be effective May 1 and is subject to certain closing conditions which are expected to be completed shortly.
George Zacharias, co-founder and CEO of 7Strata, said the deal will not only give his team access to MindTree’s global customers but also help leverage its well-established brand and delivery excellence processes. As a part of the acquisition, the core management and delivery team of 7Strata will become a part of MindTree’s IMTS business.
“Since, it is not a company acquisition but asset purchase deal, 7Strata will become part of MindTree from day one,” said Parthasarathy.
The name of Kyocera Wireless India, which has been merged into MindTree to become MindTree Wireless, will be changed soon.

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