Megasoft to offer additional stakes to ProLease
By Venkatachari Jagannathan | 03 Aug 2002
Chennai: Hibernating for nearly three years after a high-profile takeoff, Megasoft has resurfaced with the news of a fresh equity infusion. The company is all set to receive $2-million investment from InterPro Scribe, part of the US-based business process-outsourcing group ProLease.
The investment will increase ProLease stake in Megasoft to 20 per cent. Currently the $532-million American group holds around 12 per cent in Megasoft’s Rs 10-crore equity. Megasoft is offering the fresh stake at a premium of Rs 60 per share, with a face value of Rs 10, subject to one-year lock-in period.
“We will get our shareholders’ sanction for the stake sale in its extraordinary general meeting on 14 August 2002,” says Megasoft chairman and CEO Ravindra Sanna Reddy.
Explaining the rationale for increasing its exposure in the Rs 19-crore sales (net profit: Rs 3.2 crore) Megasoft, ProLease India chairman and managing director Arvind Swami says: “Our client-base has expanded since 1995. Globally, a lot of scope still remains in the field of transaction processing. And there are lots of synergies between the two companies that need to be exploited. The next 50 days will be spent in integrating the operations and mining data.”
ProLease operates in the area of payroll processing, medical billing and transcriptions, coding and insurance claims processing. The group also has call centres in Australia and the Philippines.
ProLease president and CEO Bala Ramoorthy says the group will soon set up a 150-seat contact centre in Chennai. “It can be scaled up to 500 seats. Further, the infrastructure created will be utilised for our other operations, thereby accelerating the breakeven point.”
About Megasoft’s future plans Reddy says his company will acquire the $15-million income Megasoft Consultants Inc, a six-year-old consulting outfit. In addition, Megasoft is still considering acquiring Vector Consultants, an Atlanta-based consulting firm.
“With 400 software professionals, we hope to recruit another 150 this fiscal, says Megasoft head (operations) Naresh Nagarajan. “The company has planned 20-per cent revenue growth, and the recruitment will be in line with the financial target.”