Subex buys US software company - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Subex buys US software company

Mar 6, 2000

Subex has announced a takeover of IV Generation Inc USA a telecom software services firm for $ 6.7 million (Rs 290 m) in an all cash deal. The company which has revenues of around $ 6 m includes AT & T and Lucent Technologies as its customers. Subex is mainly into the manufacture of telecom software. It’s products include ‘Ranger’ a fraud detection mechanism used by cell phone companies. The company has Hutchinson Max as one of its clients. The company made a private placement of Rs 250 million at a premium of Rs 740 per share a few months ago.

Subex is following the trend set by the other the Indian software companies, which have plans to takeover companies based in the USA. This is the biggest market for Indian software companies and the companies want to have a local presence in these markets.

It is the private placement that Subex has made that has enabled the company to fund the all–cash deal. However, the fact remains that an equity swap would have better for the company since the current market capitalisation of Subex at over Rs 7 bn would have helped the company fund the deal quite comfortably. It is quite possible that the US company has preferred an all cash deal since it is larger in size than Subex.

However, the flip side is that with the US markets valuing tech companies highly, takeover of companies at the current valuation levels may elongate the pay back period. The current deal however seems to be at a decent valuation from Subex’s point of view especially keeping in mind the companies business, its revenues and its client list. How much of the US company’s turnover is accounted for by AT & T and Lucent one does not know.

Market View:
With the Indian market valuing tech stocks in general and the telecom software businesses in particular at high levels, Subex has been rated as a buy by most analysts.

Equitymaster requests your view! Post a comment on "Subex buys US software company". Click here!

  

More Views on News

Sorry! There are no related views on news for this company/sector.

Most Popular

My Recent Recommendation Will Profit from the Global Supply Chain Crisis (Profit Hunter)

Mar 31, 2021

A tiny chemical company, started in the Licence Raj era, is a great example of a new wealth creating opportunity.

My Stock Trading Strategy (Fast Profits Daily)

Mar 31, 2021

In this video I'll show you exactly how I go about picking stocks for trading.

4 Stocks to Make Your Portfolio Immune to the Second Covid Wave (Profit Hunter)

Apr 6, 2021

Rather than predicting the market, successful investing is more about preparing well and placing your bets accordingly.

If the Market Falls, I Will Do This... (Fast Profits Daily)

Apr 1, 2021

What should you do if the market falls? In this video, I'll tell you what I will do.

India: Recovery Stalled by Vaccine Games? (The Honest Truth)

Apr 13, 2021

Ajit Dayal on how India's vaccine strategy will impact the markets.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

TRACK FLEXTRONICS SOFTWARE

  • Track your investment in FLEXTRONICS SOFTWARE with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

MARKET STATS