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K K Birla Group to buy software companies in US

Talks have already been initiated with three companies for possible take-overs.

The buyout would be routed through the India Software Group, a division of

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Chambal Fertilisers and Chemicals Limited, a group company.

This is part of the group's long-term plans to increase presence in the software sector.

"The management has already given an in-principle clearance for acquiring a suitable software company abroad," India Software Group President P R Shankar Kumar has been quoted as saying.

"No ceiling has been set on the amount of funds that can be used for the acquisition," he explained.

"We are currently talking to two companies involved in workflow and document management systems and a third company with operations in graphics handling for possible acquisitions," Shankar Kumar revealed.

The graphics handling outfit would compliment India Software's plans in the Web-based solutions segment.

"If we decide to acquire one of the three companies that we are talking to, it could mean an investment of about $10 million to $20 million," Shankar Kumar said.

"We are interested in an outright take-over and are not too keen on joining an existing company as a partner," Shankar Kumar said.

India Software had initially divided possible overseas take-over targets into two categories - companies in trouble with the promoters wanting to sell out, and companies that are doing well, where the promoter wants to make a profitable exit.

"The first option is too risky and the second category would have proved to be too expensive. We have, therefore, decided to take a middle path," he said.

"Raising the funds required for the acquisitions is not much of a problem," he said.

India Software Group was started only last year as a division of Chambal Fertilisers. It has just completed a Rs 35 million investment in a 12,000 square feet software development centre at Madras.

"India Software is also likely to be hived off as a separate company during the next two years when we start earning our own keep," Shankar Kumar said.

The division has started with focus on ERP implementation, workflow and document management and Web-enabled and e-commerce solutions.

It has already struck up strategic alliances with Oracle, Lotus and the SAS Institute - the world's largest closely held software company.

"We would like to evolve into software development arms of these alliance partners," Shankar Kumar said.

The group, with interests in fertilisers, cement, engineering, shipping, media and sugar, is also currently in the process of investing $32.5 million in a fertiliser plant in Morocco.

- Compiled from the Indian media

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