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Oracle gobbles up i-flex for $909 million
i-flex Solutions, India’s largest applications software
firm and maker of core-banking solution, Reveleus to be
acquired by Oracle.
BY OUR BUSINESS CORRESPONDENT
2 August, 2005: Oracle has announced it would buy majority stake in i-flex Solutions. i-flex is India’s largest applications software firm.
The deal is worth $909 million, or around Rs 3,960 crore, media reports said.
Oracle will buy Citigroup Venture Capital International’s 41 % stake in i-Flex for around $593 million or close to Rs 2,583 crore and give an open offer for public shares. The open offer is estimated to cost $316 million. The offer price is slated to be around Rs 882.62 per share.
Oracle expects the transactions to end by the end of this year.
Oracle President Charles Phillips said there were no plans to de-list the firm from Indian stock markets.
i-flex’s products were contributing to 54 per cent of its sales. i-flex’s software products are well-known for its applications in corporate banking, consumer banking, investment banking, internet banking , asset management and investor services.
Nine out of the world’s top ten banks run Oracle’s ERP applications, according to Oracle CEO Larry Elison.
In 2004-2005, i-flex posted revenues of Rs 1,140 crore and earnings before interest depreciation and tax of Rs 277 crore. Net profit stood at Rs 203 crore.
i-flex now provides software and services to 575 banks spread across 115 countries. The world’s largest selling core-banking solution, Reveleus, is an i-flex product.
Sources said the present i-flex management team is likely to be retained by Oracle even after the acquisition process is completed .
Oracle plans to align i-flex’s product development, sales, marketing and services activities. i-flex’s links with Citigroup, its main customer, is unlikely to be affected.
About 90 per cent of i-flex customers are currently running on Oracle technology.
“The inevitable transition from legacy systems to modern applications has created a multi-billion dollar opportunity, and because no single supplier has been able to meet customer needs, the banking software market is highly fragmented. Customers have been looking for a tier 1 software partner to help modernise their systems and lower their maintenance
costs,” said Oracle President Charles Phillips, who is likely to join i-flex board.
Oracle is the world's largest database and application development software vendor. It was founded in 1977 by Larry Ellison. The Oracle database was the first DBMS to incorporate the SQL language. Oracle offers a variety of application development tools. Oracle Corporation is headquartered at Redwood Shores, California.
BY OUR BUSINESS CORRESPONDENT
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