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Business – MindTree to Buy Kyocera Wireless India in Cash Deal

DHANYA ANN THOPPIL and AMEYA KARVE
BANGALORE — Indian software company MindTree Ltd. said Tuesday it will buy wireless-products developer Kyocera Wireless (India) Pvt. Ltd. for an initial cash payment of about $6 million.

The deal also includes further cash payments based on the local unit of U.S.-based Kyocera Wireless Corp. meeting certain revenue targets in the fiscal years ending March 2011 and 2012, MindTree said in a statement.

The statement didn’t provide the revenue targets and the total potential value of the transaction.

The unit, which employs about 600 people, will continue to provide product-development, testing and software-engineering services to its current parent and other Kyocera entities on a contract basis, the statement said.

MindTree said it expects the acquisition to add about $9 million of revenue in the period from October to March in this fiscal year, with a net profit margin of 13%-15%.

“This means the company could increase its (revenue) guidance by $9 million” for the current fiscal year, said a Mumbai-based analyst, who declined to be named. Its annualized revenue from this deal would amount to $18 million-$20 million, the analyst added.

In July, the company had lowered its outlook for the current fiscal year, citing uncertainty due to the global slowdown. MindTree then said its consolidated earnings would be $30.4 million-$36.8 million on revenue of $255 million-$270 million, compared with its previous view of $37.7 million-$39 million on revenue of $290 million-$300 million.

Write to Dhanya Ann Thoppil at dhanya.thoppil@dowjones.com and Ameya Karve at AmeyaAnil.Karve@dowjones.com

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September 29, 2009 - Posted by | Uncategorized |

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