US based CDC Software Inc in talks for acquisition of promoters’ 45.41% stake in Bangalore based Sonata Software Limited

American firm, CDC Software Inc. is in talks for the potential acquisition of a stake in Bangalore based information technology firm, Sonata Software Ltd. The US based firm is mulling the acquisition of promoters’ 45.41% stake in Sonata Software Ltd, one of Bangalore’s foremost information technology services and solutions providers.

Reports have however emerged that an unknown Indian IT firm may as well be mulling a stake acquisition in Sonata. According to the reports, an unknown Bangalore based IT company may be acquiring a promoters’ stake in Sonata Software Ltd, similar to CDC’s. The investment move marks the US firm’s foray into the Indian IT sector, one of the fastest growing globally.

However, for the Indian firm keens a stake acquisition in Sonata, analysts suspect the move might be targeted at diversification into Sonata’s product space. The promoters’ 45.41 per cent stake in Sonata Software is divided as follows; as of June the 30th this year, Bhupati Investment Finance owned about 21.94 per cent stake for which Shyam Bhupatirai Ghia owned a majority. On the other hand, Rajan B Raheja and family had 22.05%; Mukund D Dalal owned 1.23%, amongst other promoters.

Sonata Software Ltd’s promoters have been keen on leaving the business, as their other venture, Futura Polyesters, experiences losses for five consecutive quarters. Futura Polyesters manufactures and markets polyester products and its revenues have varied at Rs.88 Crore to Rs.110 Crore. CDC Software is estimated to be worth $204 million, about Rs 938 crore and offers hybrid enterprise software applications, both on premise or cloud deployments, and services.

The firm has a foothold that spans the globe, with a presence in more than 50 countries. At the beginning of 2010, CDC’s global chief executive, Peter Yip, reported that the firm was keen on investing $200 million in the acquisition of additional firms, especially in cloud computing segment in India amongst other states in the coming years.

Sonata Software Ltd also boasts a global presence with operations across the US, Europe, Middle East and the Asia Pacific expanse. Sonata Software had acquired 50.1% stake in TUI InfoTec in an all-cash transaction in September 2006.  CDC is hopeful that the India and South East Asia’s considerable growth potential in the coming decade will contribute about 30 per cent of its total revenue. Shares in Sonata Software today closed 6.3 per cent higher at Rs 56.30 on the Bombay Stock Exchange.

14 Sep 2010.