Helios & Matheson in expansion gear

With acquisitions and mergers as the quickest way to expand globally nowadays, it is not surprising that Chennai-based Helios and Matheson Information Technology Ltd., a healthcare focused IT firm, is planning to consolidate its earlier acquisition of a listed US company, The A Consulting Team (TACT), and embark on fresh ones.“Three hot prospects worth US$ 50-100 million are on the anvil; all of them reputed and listed American companies in healthcare verticals. Acquisition of one of the three is expected by March 2007,” V Ramachandiran, chairman told this website’s newspaper.Ramachandiran said integration of an acquired company takes eight quarters and the company expects to integrate US$ four million of the US$ 27 million TACT top-line by March 2007. Explaining the advantages of acquisition for foreign companies, Ramachandiran said, “These companies are not familiar with India, so operating individually in the country would be a problem for them. Moreover, cost of services is 50 percent higher in Europe and America compared to that in India.” For an Indian company, a foreign acquisition brings a basket of reputed clients to its fold, results in improved profitability and brings down operating costs further.With the new acquisition, Helios & Matheson expects to improve its turnover to Rs 394 crore (Rs 221.36 crore) and PAT to Rs 55 crore (Rs 38.14 crore) in FY07, a growth of 78 percent over the previous year. “Over the last two quarters we have been witnessing a phenomenal growth in healthcare IT (HIT) investment by our clients in the life sciences, healthcare insurance, and health maintenance organisations,” said vice president, Divya Ramachandran.“Gartner too has identified HIT as one of the six key IT trends that are expected to have a significant impact on the IT industry. Gartner analysts have predicted that by 2009, healthcare investments in IT would increase by more than 50 percent which could enable clinicians to reduce the level of preventable deaths by 50 percent by 2013.”Meanwhile, the company is adding between two and four clients every quarter to its customer list. It is planning to set up an offshore development centre in Coimbatore by the middle of next year. The company is looking at a 20-acre piece of land on which a 500-seater facility will be set up with the number to be scaled up to 3,000 employees, largely engineers, over the next three years.Starting with a builtup area of around 50,000 sq. feet, the area will be increased to three lakh sq. ft. over the same period at an investment of Rs 30 crore, to be funded from internal accruals.“It will be a generic facility. Coimbatore is well-connected with 20,000 engineering students passing out per annum, which makes it an ideal location,” added Ramachandiran. The company is also ramping up its KPO facility in Bangalore where image analysis and data interpretation are undertaken. The headcount of doctors will be increased from 40 to 80 over the next 12 months.