Date:30/04/2008 URL: http://www.thehindubusinessline.com/2008/04/30/stories/2008043052060400.htm

Back 3i Infotech buys Regulus

Our Bureau

Mumbai, April 29 IT solutions company 3i Infotech has acquired 100 per cent stake in US-based payment processing firm, Regulus Group.

3i Infotech will pay a fixed consideration of $80 million for the buy out; it would also pay an additional $20 million to Regulus based on an earn-out linked to certain performance parameters over a two-year period. The acquisition will enable 3i Infotech to strengthen its footprint across the US and provide opportunities for cross-selling to Regulus` client base, Mr V Srinivasan, Managing Director and CEO, 3i Infotech, said today.

Established in 1995, California-based Regulus provides bill presentment and remittance processing services, handling more than 2.1 billion paper and electronic transactions annually. Regulus serves about 235 clients in the insurance, finance, telecom, utilities and healthcare sectors. According to 3i Infotech, Regulus processes one in every fifty-cheque payment in the US.

The city-based company will use Regulus` technology platform to create document processing and remittance processing services in high volume markets such as India and China, said Mr Srinivasan. “In India, this could be a $25- million opportunity in the next two to three years”, he added.

Regulus reported revenue of approximately $148 million for the 12 months ended December 2007.

As valuations have been hit badly due to the turmoil in the US financial markets, 3i Infotech was able to acquire Regulus at about half of its (Regulus) revenues for 2007, according to Mr Amar Chintopanth, Chief Financial Officer & Executive Director, 3i Infotech.

3i Infotech will fund this acquisition entirely by debt, which will be on Regulus, added Mr Chintopanth.