The acquisition is worth 35 million Canadian dollars

February 10, 2010 /India PRwire/ -- Zylog in its Board meeting held on 29th January at its Registered Office announced the acquisition of Canadian Company for Canadian Dollar 35 Million. This acquisition is through the Company's Creditors Arrangement Act (CCAA) bidding process where Zylog emerged as the successful bidder. Brainhunter is into Consulting and Engineering services in Canada with major presence in Government, Telecom, BFSI, and oil & pipeline Verticals. The rationale and strategic fitment of this acquisition is given below

Attractiveness

• Leading professional services firm in Canada
• Ready access to a large talent pool
• 1400+ contractors
• 400+ diversified customer base with extensive preferred vendor relationship
• 35+ Government departments serviced
• 40+ customers contributing individually to more than C$ 1 million revenues
• On-going restructuring activities to improve margins
• Technology platform

Cost Synergies

• Potential to save costs on account of offshoring of certain contracts
• Sourcing of contractors from India for non government businesses
• Further reduction in non-billable staff
• Savings on account of delisting BH
• Optimizing operating leverage by streamlining infrastructure costs and other administrative costs to further realize scaled economies in the combined business

Revenue Synergies

There is significant potential to:

• Establish a strong footprint in Canada
• Service existing customers of Zylog in Canada
• Diversifying revenue streams by offering comprehensive IT solutions to the existing customers of Brainhunter other than consulting services
• Cross-selling Zylog's solutions and services offerings to Brainhunter's customers

Commenting on this acquisition, Mr. Sudarshan Venkatraman, Chairman and CEO said "A significant portion of the Brainhunter's revenue is derived from the Federal Government of Canada. Around 30% of the services rendered are to various Federal Government of Canada agencies and departments. Also, Brainhunter has a wide spread client base of over 400 Blue-chip organizations across various sectors including BFSI, Information Technology, Telecom, Government and oil & pipeline. Zylog has been looking to enter Canada for its operations and this acquisition would provide us with the appropriate platform. The Target caters to Government departments, BFSI, Telecom which are the key focus segments for Zylog. Hence, there is high potential for cross-sell".

Mr. Ramanujam Sesharathnam, Managing Director and COO of Zylog said "The Company has the 'Preferred Vendor Status' with many of its customers and have been servicing these customers for a long period. The Canadian economy is one of the few which have been least affected by the recent downturn. The IT spends of the Federal Government of Canada and the Banks have increased year on year and this trend is expected to continue. This provides a huge potential for Zylog to equip and position well to tap this opportunity".

Source: Press release distribution via India PRwire

Notes to Editor

Zylog Systems Ltd is a global technology integrator and business solution provider with more than 2000 employees worldwide focused in developing and delivering enterprise IT solutions and services using the emerging technology platforms to keep the TCO low and ROI high. Zylog Systems Ltd is a pioneer in business and technology solutions, innovations, has expertise in systems providing Onshore, Offshore & Near shore technology solutions and services to the enterprises worldwide.

Zylog Systems Ltd has been recognized and listed in CRN Fast Growth 100 for the year 2009 and ranked 245th among North America's Top 500 Technology Integrators in VARBusiness 500 list and also won "Top Technology Practices" Award for Excellence in "Greenware Computing". Please visit www.zslinc.com to explore more about Zylog Systems Ltd and its offerings.

For more information, please contact:
Senthil (Associate Consultant)