Page 32 - IACC Newsletter March-April 2014 Issue 03

Basic HTML Version

India’s Investments in U.S
Tech Mahindra buys Lightbridge Communications Corporation for $240 million
Tech Mahindra, India’s fifth-largest IT service company has entered into an agreement to buy US-based network services
company Lightbridge Communications Corporation (LCC) for $ 240million (Rs 1,486.5 crore).
The deal, expected to close by the January-March quarter, makes it the company’s its largest acquisition after it bought
over Satyam five years ago. Tech Mahindra bought trouble-ridden Satyam for Rs. 2,889 crore in 2009.
The Virginiaheadquartered Lightbridge is one of the largest independent global providers of network engineering services
to the telecommunications industry, withmore than 5,000 employees in over 50countries, and annual revenues in excess
of $400 million (Rs 2,478 crore), said a statement fromTechMahindra. “We expect network services to be a major growth
engine for our organisation,” said Vineet Nayyar, executive vice chairman of Tech Mahindra.
“We will now be the largest and most comprehensive provider of technology services to communications service
providers,” said CP Gurnani, MD & CEO, Tech Mahindra. Following the acquisition, Tech Mahindra’s revenue for the
financial yearmay see an upward adjustment of 10.3% in 2015-16 from what was estimated earlier, according to Sarabjit
Kour Nangra, vice president, research, Angel Broking.
“However, the deal may be margin-dilutive for the near term,” she said. For the financial year 2015-16, Tech Mahindra's
revenue would be Rs. 27,484 crore and net profit Rs. 3,666 crore, according to Angel Broking estimates.
Copyright © 2014 HT Media All Rights Reserved
Aurobindo wins Natrol bid with $132 million
Company set to enter the branded nutraceuticals business
Hyderabad-based Aurobindo Pharma Limited said recently that it's US subsidiary Aurobindo Pharma USA Inc. was emerged
as the highest bidderwith $132 million (around Rs 812.5 crore) for acquisition of nutritional supplement maker Natrol Inc
and other affiliates.
Through this acquisition the company aims to diversify its operations beyond the traditional generics business especially
into the nutraceuticals targeting the US and other international markets. The auction process for the acquisition of the
assets of Natrol with an agreement to take on certain liabilities was initiated by the United States Bankruptcy Court for the
District of Delaware after the company filed for bankruptcy in June this year. Natrol stated in the bankruptcy petition that
it had up to $ 500 million assets and up to $ 100 million in liabilities, according to the reports. The auctionwas launched on
November 10 with an offer of about $ 90million, which was bested by Aurobindo.
In a statement Aurobindo said Natrol is an excellent strategic fi t and provides the right platform for creating a fully-
integrated OTC platform in the USA and in other international markets. "The acquisition of Natrol along with some
incremental investment and the R&D would help achieve our aspiration of entering the branded nutritional supplements
business which offers a good value. The size of the nutraceuticals business in the US is about $ 35 billion, which is
expected to go up to $ 55 billion by 2020," N Govindarajan, managing director of Aurobindo told media.
Manufacturing of all the products of Natrol was being done in the US and Aurobindo would continue with these
operations as they tend to be cost competitive, according to him. Natrol is a 30 plus year brand with seven of its products
completing 20 years in the US market enjoying a loyal and a stable customer base, he said. The process of acquisition,
which is subject to final approval by the US Court, including other statutory approvals, is expected to be completed by