Viney Sharma & Rahul Kumar, June 18, 2007
The Economic Times (Delhi edition)

The buzz is getting louder in Chandigarh. In the last few years, Le Corbusier’s City Beautiful buried its image of a beautiful lazy abode of the richie-rich and emerged as a bubbly IT hub challenging, albeit in a lesser form, Bangalore and Hyderabad’s supremacy in the business. Now, the city’s myriad small software and hardware firms are consolidating through mergers and acquisitions and pushing for the next phase of growth.

It’s not just foreign firms acquiring small Chandigarh-based companies, information technology firms in the city and in satellite townships such as Mohali and Panchkula are also stretching themselves out in the M&A space. Two weeks ago, the Chandigarh-based animation entertainment firm Compact Disc India bought the UK-based animation firm Mobsoft for a consideration of $2-million. CDI has more acquisitions up its sleeve and plans to float another company under its fold, Media One, in the UK with an investment of around $50 million. Compact Disc chairman Suresh Kumar says he is also in talks with a few big Hollywood production houses like Pantheon Entertainment, Hide Park Film and Canyon Films. The range of the deal can be anywhere between $20-30 million. “We needed to invest in a country with free flow of exchange, so we chose the UK,” he says about the Mobsoft deal. Barely a day before the CDI acquisition, the Singapore-based $2-billion infotech company eSys announced it will make Chandigarh its global headquarters. The IT component distribution major, which produces 5,000 personal computers a month and supplies more than 25,000 PCs to leading international computer brands each year, will make Chandigarh its global backoffice from where it will provide round-the-clock services to its 40 offices across the globe. This is just the tip of the iceberg.

Other companies like Nvish Solutions, Mobera Systems, SAP are all planning to up the ante soon. Chandigarh-based business process management company Nvish Solutions recently acquired the US-based Avaap. A few months ago, German Software major SAP had taken over Virsa Systems, a privatelyheld leading supplier of cross enterprise compliance solutions. Founded in 1966 by Jasvir Gill,Virsa Systems then had over 300 enterprise customers. SAP offices are located in the US, the UK, Germany, France, India (Chandigarh), Singapore, Australia and Japan. Prior to Virsa takeover by SAP, the company, through its Indian arm Virsa Systems, had been in operation in Chandigarh since the past year and had recently shifted to its new premises in the upcoming Chandigarh Technology Park (CTP) in a complex having over 13,000 square feet of space developed by DLF. Software exports from in and around Chandigarh have buoyed up to Rs 550 crore during 2006-07 up from Rs 423.04 crore in the previous year.
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