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Flextronics acquires India's FutureSoft
Flextronics, the world's largest contract electronics manufacturer, has acquired telecoms specialist Future Software.
Flextronics International Ltd, the world's largest contract electronics manufacturer, has acquired Indian telecoms specialist Future Software Ltd (FutureSoft), the chairman of the Indian firm KV Ramani said on Friday.
Ramani told Reuters the value of the deal signed on Thursday to sell 100 per cent in privately held FutureSoft will be disclosed after approvals from Reserve Bank of India and the Foreign Investment Promotion Board (FIPB) expected in four-six weeks.
The acquisition comes two months after Singapore-based Flextronics said it would buy 55 per cent in Hughes Software Systems Ltd, another Indian telecoms software company, to boost offerings to clients like handset maker Sony-Ericsson.
"They (Flextronics) are acquiring five-six companies in India as a plan to make it a global design services hub," said Ramani, who also co-founded Hughes Software.
"The Indian strategy is to expand design. It is not just a cost reduction exercise."
Flextronics is among several global leaders expanding their footprint in India, where an abundant pool of high-tech engineers co-exists with an army of low-cost English-speaking workers who deliver back-office services.
FutureSoft, which has 600 employees, expects to close the year ending March 2005 with a net profit of $3.5 million on a revenue of $23 million, up from a profit of $700,000 on a revenue of $15 million in the previous year, Ramani said.
The FutureSoft deal was concluded during a low-key visit this week to India by Flextronics chief executive Michael Marks.
Ramani, who recently gave away his six per cent stake in Hughes Software worth about Rs 1 billion ($21.6 million) to a charity, holds about 55 per cent in FutureSoft.
Private equity arms of chip-maker Intel and India's Infrastructure Leasing and Financial Services Ltd (IL&FS) hold 13 per cent each.
