Software services and integration company MphasiS has entered into
a memorandum of understanding with Spectrum Software, an Atlanta-based
company for marketing services in the central US. The unique alliance
is not just a marketing tie-up, and may develop into something more.
to the arrangement between the two companies, MphasiS will absorb
Spectrum's complete workforce of 25 employees in the US to form
a joint SBU (Strategic Business Unit) called MphasiS-Spectrum.
will be headed by Spectrum Software's president Sarathi Srinivasan
and will cater to a mutually agreeable set of clients. It is expected
to give MphasiS an entry into application development in telecom
and finance areas. MphasiS-Spectrum is expected to enable technical
and marketing executives of Spectrum to leverage the size and capabilities
as both the companies said that they were open to the prospect of
single-digit cross-equity holdings of small amounts in near future,
and that the current relationship could lead to a joint venture,
MphasiS maintained that it had no intentions of acquiring Spectrum
does not fit into the traditional business acquisition model, the
software services and integration company said.
alliance will give us access to high-end senior technical people
and is the preferred route when compared to an outright acquisition,"
MphasiS, chairman, Jerry Rao told ET.
could be described as a half-way house towards a joint venture,
as we both are open to the idea but have no concrete plans in immediate
future," Rao said. Spectrum Software is a 10-year-old company that
undertakes systems design and consulting projects in multimedia
based software products for clients such as AT&T and Eaton Corporation.
has been working with MphasiS for a while as a supplier of software
services to Spectrum's clients.
however, will share a non-exclusive relationship with MphasiS and
will not be restricted to any geographic area for operation.
is only meant to to strengthen the existing relationship between
the two companies and to avoid sub-contracting for clients, say
officials. Spectrum will provide the marketing front for MphasiS'
key clients, while MphasiS would have access to the Central US geography,
with a minimal amount of overlapping of services rendered by the
BFL Group, inclusive of its subsidiaries, reported a consolidated
net profit of Rs 9 crore for the quarter ended September 30, 2001,
compared to a net loss of Rs 2.2 crore during the same quarter last
stand alone basis, MphasiS had a net profit of Rs 11.4 crore for
the quarter ended September 30, 2001 as against Rs 4.1 crore in
the same period last year.
provided Rs 2.4 crore as a one-time charge during the quarter towards
restructuring costs related to closure of the company's European
operations including the closure of the healthcare product line.
costs comprise staff costs, lease costs and accounts receivable.