Pentafour Software and Exports differentiates itself from its software peers on the basis of large exposure to high margin multimedia business. It has a competitive edge in multimedia due to its excellent track record and long term relationship with global multimedia companies. It is one of the few companies worldwide that can produce complete content for multimedia-based movies.
Animasia and its subsidiary have a performance track record of around 41 Disney television shows including Darkwing Duck, Goof Troop, Bonkers and Aladdin. Animasia has a full-fledged animation studio based in Quezon, Philippines. It boasts of skills in 2D and 3D with an extensive team of artistes and caters to production of television serials and feature films.
Given such a background, the acquisition fits in nicely with Pentafour's scheme of things. The company has outlined plans to acquire more companies that offer synergies to its multimedia business. A few weeks ago, it was ranked third behind Disney and Lucas in the global multimedia business.
The company proposes to become a force to reckon with in the global animation business. It will have to sustain itself with continuous technological inputs, and this is where acquisitions like Animasia will prove critical. In addition to the technology, Pentafour will also be able to leverage the target company's client base.
Pentafour's stock has been trading at a discount to its peers largely due to poor management perception. The latest round of Income Tax probe into the company's accounts will magnify analysts' concern. While analysts' had recommendation a 'BUY' earlier after the company's excellent 2QFY2000 results. The recommendation may need to be reviewed in the light of rigging allegations.
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