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Headstrong in merger talks with Elind

Abhrajit Gangopadhyay

Bangalore , June 18

US software consultancy firm Headstrong Inc with revenue of $100 million (around Rs 455 crore) is in merger talks with Bangalore based Intel-invested software maker Elind Computers, sources close to the deal said.

However, the deal size could not be ascertained. Top Elind officials, while admitting that such talks were on, did not detail further. "We are also in talks with two other investors," Elind officials said.

However, sources said that Headstrong deal was `almost through' but "Term sheet and acquisition agreement papers" were yet to be signed. Headstrong officials said, "It's too early to comment".

According to sources, the deal is likely to be signed by the end of this month. Elind, which had been scouting for fresh round of funding from new investors, has found a suitor in Headstrong, industry sources said. Headstrong sees financial services as a significant growth driver and its Bangalore centre currently caters exclusively to the investment banking needs of the US markets.

The company aims to increase the revenue of its financial practice to jump to $45 million (around Rs 205 crore) by end of this calendar from $23 million a year ago. Financial services vertical is expected to contribute close to 43 per cent of Headstrong's current year's revenue.

Elind is an application solutions provider for global securities market. The company's flagship STRIDE suite of products includes order management and market making, risk management and reporting functions and has several takers in various stock exchanges. The company's client list includes TradingLab, Milan and Creditex, New York.

The company currently employs 60 professionals. Headstrong had merged with Techspan in late 2003 that helped the combined entity offer multi-shore delivery capabilities.

Techspan was founded by HCL co-founder Mr Arjun Malhotra, who moved on to take over as Chairman and CEO of Headstrong. Headstrong is a privately held firm whose investors include Welsh, Carson, Anderson and Stowe, and H&Q Asia Pacific.

"Elind's offering to the stock market could be a good fit for Headstrong's portfolio," a software analyst with a local brokerage said.

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