• OUTLOOK ARENA
  • VIEWS ON NEWS
  • FEBRUARY 8, 2000

BFL Software buys Mphasis in an all stock deal

BFL Software buys Mphasis, a US based software outfit for Rs 8.64 billion in an all stock deal. Mphasis chief Jerry Rao will take over as Chairman of BFL Software.

BFL Software was earlier part of the Bangur group. Barings took a 52% stake in the company two year’s back, revamped the company and provided it with business contacts. The company boasted of a client list that included the likes of Compaq and Federal Express.

Till last year 25% of the revenues of Rs 1 bn were accounted for by Y2K servicing. The company however could not make a successful transition and made a loss in the last quarter. This along with the departure of the company’s chief executive revealed the company to be in bad shape.

All along there were rumours that Barings was interested in selling the stake. The current deal has been primarily structured by Barings which is also an investor in Mphasis. The deal is on the lines of the merger of Leading Edge and ECapital where the ECapital chief Suresh Rajpal took over the merged entity. Chase/Oppenheimer which was an investor in both the entities had put in place this deal.

The deals of the current nature highlight the fact that the top class manpower availability is the key to managing growth in the fast track software industries. This is likely to become even more critical in the future. Even in the last few months only those companies, which boast of a top class management have been able to make a successful transition post Y2K.

Market View:
Most analysts have rated BFL Software as a buy primarily because of its lineage, its facilities and its clients. The market views BFL’s current problems as temporary and expects the company to do well in the FY2001.

Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

Equitymaster Agora Research Private Limited (Research Analyst)
103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407