Bangalore: Information Technology (IT) firm Mphasis BFL Group today (Apr 2, 2004) announced acquisition of Bangalore-based Kshema Technologies, for about $ 21 million through a combination of stock and cash deal to strengthen its technology offering to its global customers.

Mphasis will pay $ six million in cash to acquire 33 per cent stake with the rest (67 per cent) in stock of Kshema, which has over 400 people working in the embedded solutions space in industrial automation, healthcare and life sciences and enterprise applications.

"It (Kshema) will provide a fillip to our service offerings in the embedded solutions and industrial automation space and help us stay ahead of our competitors in a challenging global market,' Mphasis BFL chairman and CEO Jerry Rao told reporters in Bangalore.

Privately held Kshema, which has 35 clients, is expected to report $ 15 million in revenues and a profit of Rs seven crore during fiscal 2003-'04. It had cash reserves of Rs 60 crore.

Kshema's authorised capital is Rs 18 crore and has a paid-up capital of Rs 3.4 crore. Venture capital firm Global Technology Ventures held 48 per cent stake in the firm, Singapore Computer Services owned 30 per cent stake, which it acquired for $ 12 million in early 2002.

"We wanted scale and were looking out for acquisitions or aligning with a similar player to tap global business," Kshema CEO Anant Koppar said. He will be president of technology division of Mphasis and also a Board member Mphasis Corp US.