SQS acquires 75% stake in Pune based Verisoft

I had a pleasure of meeting Gireendra Kasmalkar of Verisoft at Hi-Tech Pune, where he announced news of his company being acquired by the global leader in their space SQS. Gireendra mentioned he will continue to be the CEO of SQS India and further dirve growth of the company.

SQS Acquired 75% of Verisoft for a consideration of 12.1 crores, the deal is part cash, part equity. 

Verisoft has close to 150 employees and have successfully executed over 300 Testing projects, which now their parent company are global leaders in the space of software quality and testing, having 1,400 employees worldwide. Over the last 25 years, they have executed more than 4500 projects for over 400 clients and some of their promiment clients include names like Barclays, BP, Credit Suisse,
Daimler, Deutsche Bank, Deutsche Post, Dresdner Bank, Eurobet,
Eurogate, MessageLabs, Phoenics, T-Mobile, T-Systems, or Zurich Group.

Following is the terms of acquisition

The maximum consideration for the acquisition of 75% of
VeriSoft will be 121m INR (€1.8m) of which 44% will be satisfied in
cash and up to 56% can be satisfied by the issue of new SQS ordinary
shares to the vendors (who include current VeriSoft management). Of
this maximum consideration, 40m INR (€0.61m) (the 'Initial
Consideration') is due as a cash payment on Closing and 68m INR (€1m)
will be deferred and payable (up to 100% in newly issued ordinary SQS
shares) over the two years following Closing, dependent upon the
achievement by VeriSoft of specified growth and profit targets. A
further consideration of 13m INR (€0.2m) will be paid for a 95 year
lease over land that VeriSoft has been allotted in the Special Economic
Zone ('SEZ') IT Technology Park in Pune. The SEZ provides a favourable
tax status for new work and SQS expects that it will build its new
offshore testing centre there over the next 2 years. The acquisition is
expected to complete on 1 July 2008.

Gireendra's quote for the press release says, "Being acquired by the world leader in our industry is a great
endorsement of our company. While both the companies are independent
testing companies, there is an excellent fit between the two companies
due to the off-shore capability as well as new verticals that we bring
to the table. Being part of SQS will open up a wealth of opportunities
for growth both in terms of offering a broader range of services in our
home market and directly exposing us to a much greater market globally.'

Rudolf van Megen, CEO of SQS, said, 'I am delighted to be
welcoming VeriSoft into the SQS Group. It is important that we are able
to offer our customers a solution that is tailored to their needs and
increasingly this involves a combination of off-shore and on-shore
services. VeriSoft brings with it an established local and
international customer base and additional capabilities particularly in
the high growth computer game software and standard package software
testing market. We therefore believe it to be an excellent addition to
SQS.'

Looks like a win-win deal for both the parties, well done and Congrats to Gireendra and his team.

More about Verisoft at http://www.verisoft.in and http://www.verigames.in and more about SQS can be read at http://www.sqs-group.com