20th September, 2004
Flextronics will acquire India’s FutueSoft, which provides communication software and services. Intel Capital, a major private equity stakeholder in FutureSoft, declined to comment on the exit. IL&FS Investment Managers, the other shareholder, could not be reached for comment.
FutureSoft Chairmen and CEO K.V. Ramani told AVCJ that Intel Capital was not involved in the negotiation of the transaction, as it joined FutureSoft about 15 months ago as a strategic rather than active investor.
“The acquisition by Flextronics is part of a global strategy to grow the large telecom design services coming from India,” Ramani told AVCJ. “They’d be able to serve ODMs and OEMs globally, and offer them not only services form India but also help them to find the products from India. So it’s going to provide significant value as well as a growth opportunity outside India for our customer in Asia, as well as the US and Europe. They don’t look at India purely for software services outsourcing. But they have started looking at India for technology, communication and [other services].”
“This is a very good development, and demonstrates the increasing interest of global strategic investors in India and in particular its technology sector. We can certainly anticipate more of this happening,” a spokesperson at the International Finance Corporation AVCJ.
Ramani saw India’s communication industry growing nicely, after the recession in 2001.”There’s potential to grow the revenues on the telecom software business in India.”
The acquisition is expected to close before 2005.