Cloud and managed infrastructure services firm, GAVS Technologies has finalized an acquisition, to be funded by its investor Basil Partners.
The deal, in advanced stages, is likely to be announced in a few weeks.
Small tech companies are active in the mergers and acquisitions space in a bid to consolidate and grow in size. "The Indian tech ecosystem has certainly been on a high in recent years with increased integration across all industries. With start-ups mushrooming in the country to offer enhanced product offerings and personalized services, India's technology industry is poised to rapidly mature in terms of the talent pool and level of services," said EY in a report.
"GAVS is at an advance stage of an M&A with another company, i.e. in the Basil Portfolio. This company has operations in the US for the last 10 years and has among its clients, a few Fortune 5 companies and has been wor king with them in the areas of risk and governance, identity access management and automation testing," said Sumit Ganguli, CEO, GAVS Technologies. He did not divulge details of the target company.
The target entity has presence in the north east in the US and has development centers at Noida and Hyderabad, he said. "Therefore the merged entity will have a pan India presence and will double GAVS' headcount, which is presently shy of 1,000 persons," Ganguli said.
"GAVS and the merged entity are aiming to be a $100 million (Rs 672.92 lakh) company within the next 24 months with 10% to 15% EBITDA."
Basil Partners being common investors in both companies will fund the acquisition for GAVS.
The transaction is expected to be part stock and part cash. "Basil has recently acquired majority shares in GAVS and we are looking at couple of other companies with expertise in analytics and one vertical, may be healthcare," Ganguli added.
Upon completion of the transaction, Basil will be able to find an exit for its investments over the next two to three years, when GAVS goes for a public listing.