Prudential ICICI to acquire 5% stake in Ampersand Software |
Prudential ICICI Mutual Fund is picking up around 5 per cent stake in Internet service company Ampersand Software Applications Ltd, days before the software company is all set to go public.
"By getting Prudential ICICI on board will validate our strategy and positioning as a global Internet service player," Narasimhan Mandyam said. Ampersand promoted by two former Infosys Technologies employees and a management consultant, plant to use the proceeds from the private equity placement for its Internet development infrastructure and facilities in Bangalore and expansion of its marketing and sales efforts in the US.
Mandyam said the initial public offering (IPO) of around Rs 27 crore will hit the market soon.
The IPO is expected to be priced between Rs 180 and Rs 200 per share. Post-IPO, the promoters will have a stake of around 40 per cent, around 35 per cent will be with Baysoft promoters and Prudential ICICI and the rest will be with the public. DSP Merrill Lynch and Jardine Fleming are the lead managers of the issue. Ampersand bought over Baysoft, a startup company sometime ago, through a stock-swap arrangement.
Nearly 40 per cent of the proceeds of the IPO will go towards expanding marketing efforts in the US, around 10 per cent in development cost and the rest in retiring debt and increasing infrastructure facilities of the company. Ampersand has a debt of around Rs 3 crore.
Pre-IPO, the company has been valued at around Rs 100 crore. During 1998-99, on revenues of around Rs 14.5 crore, Ampersand posted a profit of around Rs 2 crore and hopes to increase it to around Rs 3 crore on revenues of around Rs 23 crore.
Prudential ICICI is one among the four mutual funds in India with asset under management of over Rs 2,000 crore. It is a 55:45 joint venture between Prudential Corporation based in the UK and ICICI Ltd, one of the largest financial institutions in the country.
Mandyam said Ampersand is a pure play Internet services company that builds e-commerce solutions and Internet, intranet and extranet applications. It focuses in building business-to-business web application. It has developed software called "Zero Code", which is a combination of project management environment and code generation built for the web and on the web.
Among its clients are Sony Pictures Entertainment, Motion Picture Association of America, Polaroid ID Systems, Walt Disney Pictures and NCR Corporation. Nearly 95 per cent of Ampersand's revenues comes out of the US.
Mandyam said e-solutions from Ampersand is a complete 'specifications to product' offering that integrates operating platforms, databases, content management, multimedia and transaction security.
According to Forrester Research, a leading research-based company, sales conducted over the Internet during 1998 was around $17 billion, which shot up to $327 billion in 1999 and the number of consumers buying over the web will double to 100 million during 2000.
Source : BS
Mar 20, 2000