• PAGE ONE
• INDEX
• HOME

GDR Soft to buy Meditech in all-stock deal

C.R. Sukumar

HYDERABAD, Feb. 25

GDR Software Ltd, the Bangalore-based software solutions company, is set to acquire Meditech Software Ltd, a Hyderabad-based software products company focusing mostly on the pharma and healthcare sectors, in a complete stock deal.

Towards this, GDR proposes to allot 35 lakh equity shares of Rs 10 each to the shareholders of Meditech at a swap ratio of 7:1 -- seven GDR shares per every Meditech share -- on a preferential allotment basis.

Meditech, promoted by technocrats, is engaged in designing and development of software for computer systems, e-commerce solutions and development of products.

Some of its products developed for the pharma and healthcare sectors include Medisoft and Pharma Analyser.

GDR sources said that the acquisition of Meditech would enable GDR to improve the sales volumes and profitability.

``Since Meditech is also into Internet and e-commerce solutions and GIS solutions, it provides synergy for both the companies and would be beneficial for GDR to acquire Meditech.''

``This investment would result in Meditech becoming the subsidiary of GDR, which would enable the acquirer to synergise software development business in an effective manner. It would also help GDR to organise the activities of Meditech in a better manner ,'' they said.

Amit Ray & Company, the Bangalore-based chartered accountants, were entrusted with the responsibility of preparing valuation report.

According to the report submitted by them, the valuation of shares of Meditech worked out to Rs 136.40 per share.

Based on this, GDR negotiated with the Meditech management and agreed to invest in its shares at a negotiated price of Rs 122.50 per share on the basis of an equity swap deal.

According to the GDR sources, the minimum offer price of shares of GDR as per the SEBI guidelines works out to Rs 15.16 per share.

``However, the GDR management has negotiated with the Meditech promoters to obtain the GDR shares at a price of Rs 17.50 per share in the equity swap deal.''

Currently, the promoters of GDR hold a stake of 34.26 per cent in the Rs 11.56 crore paid-up equity capital, while the public hold 65.74 per cent.

Following the proposed offer of 35 lakh equity shares to Meditech promoters on a preferential allotment basis, the holding of GDR's promoters in the company would come down to 26.3 per cent on the expanded equity base of Rs 15.06 crore.

The Meditech promoters would end up acquiring a stake of 23.23 per cent in GDR consequent to the equity swap deal.

As the Meditech promoters and their associates were included in the category of public in the shareholding pattern, the public holding would increase to 73.7 per cent from the current level of 65.74 per cent on the expanded capital base.