India Buys Russian Programmers
Feb 05, 2003
Struggle for customers in the world market of offshore programming has taken the unexpected turn. The large Indian software exporter Mascon Information Technologies company decided on purchase of the known Russian software manufacturer V6 Technologies also focused on export of its services.
Mascon Information Technologies was based in 1982 in Chennai (India) . Today it is one of leaders of Indian offshore programming. Mascon specializes on IT-services and employs 1800 people. In June, 2002 the influential Indian IT-association NASSCOM put Mascon on the 15-th place in the rating of software leading exporters, year earlier the company took the 17-th stand. Mascon American headquarters is located in Shomburg , Illinois. Besides the company has four more representative offices in the USA, sales offices in Canada, Great Britain, Mexico and the Netherlands. For the period from January 1 till March 31, 2002 Mascon income amounted about $78 million. Among Mascon clients are MasterCard, General Electric, Citibank, Wal-Mart and Motorola. Mascon shares are traded on a stock exchange in Bombay. In best days capitalization of the company made up $144 million. Though there is a three years running fall in shares quotations of the hi-tech companies of the whole world, in July 2002 Mascon managed to win $10 million, having placed GDR on a stock exchange in Luxembourg.
Russian company V6 Technologies was based in 1996. In autumn 2000 company Vesta Solutions, daughter enterprise of the investment company Vesta Eurasia which, in its turn, was based in Russia by the investment consortium Sun Capital Partners, has got 100% shares of V6 investment . V6 has sales office in France, but it carries out the majority of export operations in Europe through Vesta Solutions. More than 50 employeers work at the head office of the company in Moscow, the total number of the developers personnel taking into account the companies-subcontractors V6 (Minsk IBA, Petersburg "Astrosoft", Novgorod "Sandy Info") reaches 150 people. The company does not show its turnover.
Purchase of the Russian software exporter by the Indian one isn't an ordinary event, the first in it's own way in the domestic IT-market. Negotiations under this bargain are not completed yet, however both parties do not deny, that discussion of its parameters approaches the end. George Albert, the official representative of Mascon in Illinois, has confirmed the presence of the preliminary arrangement between Mascon and Vesta Solutions, however he refused from official comments before papers signing. More talkative is the Russian party of the planned bargain. According to Sun Capital financial director Andrew Bukster, their party (namely Vesta Eurasia) is not going to sell its share in Vesta Solutions. Most likely, the additional issue of shares will be carried out, as a result of which Mascon and Vesta Eurasia will own Vesta Solutions (actually - V6) on an equal footing.
According to Andrey Zotov (V6 founder and general director ), negotiations with Mascon begun in 2002, were carried on in the USA, Moscow and Delhi. Their final round is to take place in Moscow in February 2003.
Purchase of V6 can be formalized also as the exchange of Vesta Solutions shares to Mascon ones. "In this case it will be a very beautiful bargain merging of the international and Russian companies", comments the source in V6. It is remarkable, that in summer 2001 Mascon already tried to merge with Indian company Maars International Software. Then the exchange of shares in a proportion of 9:1 (Mascon absorbs Maars) was planned, however literally on the eve of the statement of the bargain it was cancelled by boards of directors of both companies, explaining this step by an adverse situation in the share market. However, before the technological boom has gone on recession, Mascon managed to make one purchase: in 1999 it has got American SynergySoft for $3 million.
Anyway the key factor of success during the negotiations is estimation of V6 cost. Andrew Bukster considers that cost of the company is in a range of $5-10 million, but according to Andrey Zotov his company can cost even more. Mascon itself yet is not ready to give any comments in this occasion.
The standard estimation of incomes of the Russian offshore-programmer companies is formulated as follows: each employee brings on average $20-30 thousand per one year. "To sell the small Russian company, which basic business is offshore programming by an estimation of three-four annual turnovers is rather not bad. However, not having the information on the structure of the bargain, it is practically impossible to estimate how much money V6 is going to receive from the new shareholder for development of business, and also according to what plan and with what speed the money will be received by the company ", - the general director of St.-Petersburg company "Reksoft" Alexander Egorov comments on this bargain.
Mascon Information Technologies was based in 1982 in Chennai (India) . Today it is one of leaders of Indian offshore programming. Mascon specializes on IT-services and employs 1800 people. In June, 2002 the influential Indian IT-association NASSCOM put Mascon on the 15-th place in the rating of software leading exporters, year earlier the company took the 17-th stand. Mascon American headquarters is located in Shomburg , Illinois. Besides the company has four more representative offices in the USA, sales offices in Canada, Great Britain, Mexico and the Netherlands. For the period from January 1 till March 31, 2002 Mascon income amounted about $78 million. Among Mascon clients are MasterCard, General Electric, Citibank, Wal-Mart and Motorola. Mascon shares are traded on a stock exchange in Bombay. In best days capitalization of the company made up $144 million. Though there is a three years running fall in shares quotations of the hi-tech companies of the whole world, in July 2002 Mascon managed to win $10 million, having placed GDR on a stock exchange in Luxembourg.
Russian company V6 Technologies was based in 1996. In autumn 2000 company Vesta Solutions, daughter enterprise of the investment company Vesta Eurasia which, in its turn, was based in Russia by the investment consortium Sun Capital Partners, has got 100% shares of V6 investment . V6 has sales office in France, but it carries out the majority of export operations in Europe through Vesta Solutions. More than 50 employeers work at the head office of the company in Moscow, the total number of the developers personnel taking into account the companies-subcontractors V6 (Minsk IBA, Petersburg "Astrosoft", Novgorod "Sandy Info") reaches 150 people. The company does not show its turnover.
Purchase of the Russian software exporter by the Indian one isn't an ordinary event, the first in it's own way in the domestic IT-market. Negotiations under this bargain are not completed yet, however both parties do not deny, that discussion of its parameters approaches the end. George Albert, the official representative of Mascon in Illinois, has confirmed the presence of the preliminary arrangement between Mascon and Vesta Solutions, however he refused from official comments before papers signing. More talkative is the Russian party of the planned bargain. According to Sun Capital financial director Andrew Bukster, their party (namely Vesta Eurasia) is not going to sell its share in Vesta Solutions. Most likely, the additional issue of shares will be carried out, as a result of which Mascon and Vesta Eurasia will own Vesta Solutions (actually - V6) on an equal footing.
According to Andrey Zotov (V6 founder and general director ), negotiations with Mascon begun in 2002, were carried on in the USA, Moscow and Delhi. Their final round is to take place in Moscow in February 2003.
Purchase of V6 can be formalized also as the exchange of Vesta Solutions shares to Mascon ones. "In this case it will be a very beautiful bargain merging of the international and Russian companies", comments the source in V6. It is remarkable, that in summer 2001 Mascon already tried to merge with Indian company Maars International Software. Then the exchange of shares in a proportion of 9:1 (Mascon absorbs Maars) was planned, however literally on the eve of the statement of the bargain it was cancelled by boards of directors of both companies, explaining this step by an adverse situation in the share market. However, before the technological boom has gone on recession, Mascon managed to make one purchase: in 1999 it has got American SynergySoft for $3 million.
Anyway the key factor of success during the negotiations is estimation of V6 cost. Andrew Bukster considers that cost of the company is in a range of $5-10 million, but according to Andrey Zotov his company can cost even more. Mascon itself yet is not ready to give any comments in this occasion.
The standard estimation of incomes of the Russian offshore-programmer companies is formulated as follows: each employee brings on average $20-30 thousand per one year. "To sell the small Russian company, which basic business is offshore programming by an estimation of three-four annual turnovers is rather not bad. However, not having the information on the structure of the bargain, it is practically impossible to estimate how much money V6 is going to receive from the new shareholder for development of business, and also according to what plan and with what speed the money will be received by the company ", - the general director of St.-Petersburg company "Reksoft" Alexander Egorov comments on this bargain.