Date:21/12/2005 URL: http://www.thehindubusinessline.com/2005/12/21/stories/2005122102870400.htm

Back Ciber India to later merge with iGATE

iGATE Solutions recently acquired the balance 51 per cent stake in Ciber India, which was previously held by Ciber Inc. The CFO of iGATE Solutions, Mr N. Ramachandran, Ciber India would eventually merge with iGATE. Excerpts from CNBC-TV18's exclusive interview with N Ramachandran:

Can you take us through this deal?

This 51 per cent has been transferred for the nominal amount of $1.

What really is the transaction all about?

Ciber Inc held 51 per cent and iGATE held 49 per cent in the joint venture. It was supported in terms of all the delivery by iGATE Solutions. Ciber wanted to exit this joint venture, since iGATE has provided most of the value in terms of the infrastructure and delivery.

What was in it for Ciber to sell it to you at one dollar?

There was one big, single contract in this joint venture, which was being supported by iGATE, and iGATE would continue to do that contract. Since Ciber wanted to exit it in terms of setting up a new facility on its own in India, it was settled at one dollar, basically at the book value of the company.

What business is Ciber India in? How many clients does it have and do you plan to merge it with iGATE, or does it carry on as its independent subsidiary?

Eventually, the goal will be to merge Ciber India with iGATE. It has one very large contract and a few smaller contracts. Currently, the run-rate on this contract is about $4.5 to $5 million a year. That would eventually get merged with iGATE Global Solutions.

You plan to tap Japanese market with eyetops models — take us through that model. Where does your foray into the Japanese market stand as of now?

We have had quite a bit of successes in the Chinese markets in the recent past. Our strategy of having a lot of Japanese local engineers on board, who can work in tandem with our engineers from India, seems to have paid off and the clients seem to like this strategy. With this model, we proactively share risks with the client and eventually provide transaction-based pricing.