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|November 5, 1997||
IMR to set up Y2K units in IndiaThe US-based Information Management Resources Inc is set to construct its own software facilities at the Santa Cruz Electronic Export Processing Zone, Bombay, and NOIDA, near New Delhi, as part of its global strategy to augment capacity to meet the growing demand for Y2K projects and to leverage long-term maintenance contracts from these projects.
Discussions by IMR to acquire two software firms, BFL Software and Baysoft, have broken down.
Three of its four facilities are now operational. Recently, the company set up a software development centre in Belfast, northern Ireland. This facility staffs 70 employees. However, the number is expected to increase to 350 by 1998. Besides, IMR has acquired Link Group Holdings UK for $5.5 million. Link has 80 employees and its 1996 fiscal revenue was $11 million at the time of the acquisition, Gupta said. It will shortly change its name to IMR UK.
"Our intention is to build software facilities in countries where resources are cheap and to have marketing offices in developed countries," he said.
IMR is likely to acquire a company in Indonesia. By end of 1998, the company hopes to have its facility there operational.
IMR's India development centres are located in Bangalore and Bombay. "Our expansions in India calls for investments of about Rs 700 million in the next two years," said Gupta.
In Bangalore, the company will increase its space from 15,000 square feet to 60,000 square feet to house 750 software professionals. Likewise, at Seepz, IMR proposes to invest Rs 300 million to construct its own building. This 30,000 square feet facility is expected to house 500 software programmers.
Its Delhi operations will be similar to its Bombay ones.
"Unless we are located in multiple cities we cannot attract manpower resources located in each of these cities. Later we could even consider a facility in Calcutta," Gupta said.
In the US, IMR has raised $49 million from an initial public offering on November 8, 1996, on the NASDAQ.
The company sold 3.5 million shares of common stock at $14 per share. Last year, it raised $97.50 million in a second issue by the sale of 3 million shares at $ 32.50 per share.
According to the prospectus, "the net proceeds to the company will be used to fund the establishment of new software development and sales facilities and for working capital and other general corporate purposes including capital expenditure and possible acquisition..."
"We channelled funds from these issues into the expansions in India," said Gupta. IMR had decided to build its own facilities as it is not sure how it could assimilate employees into its organisation, he said. "We might destabilise our own organisation in the process."
Moreover, norms to evaluate companies in India are not clear. A due diligence study may not reveal much. He said IMR India is on the verge of hiring 500 people soon. "If we can add 1,000 rapidly, why bother about acquisition?"
- Compiled from the Indian media
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