AppLabs acquires IS Integration

MUMBAI
 

SEPTEMBER 23, 2006

AppLabs Technologies announced that it has acquired IS Integration, the
UK-based IT and business solutions testing consultancy for $37million (Rs 170
crore), some of which is contingent on future profits.

AppLabs said in a statement that the merged businesses will create the
largest global provider of testing consultancy, with a combined staff base of
approximately 1,500 employees and a forecasted $75 million revenue and $8
million profit this fiscal year ending in March 2007. The transaction is partly
funded by UTI Bank, Singapore.

AppLabs in June this year had announced that it has received $10 million in
funding from Sequoia Capital India. The investment in AppLabs totals $17
million, one of the largest investments Sequoia has made in an Indian company.

Under the scope of the AppLabs-IS Integration agreement all offices of IS
Integration will continue to operate as they are and all staff will remain
employed in the UK-based company. IS Integration will effectively form the
European arm of AppLabs. The company will continue to operate as IS Integration
for the next six months, thereafter it will operate under the name AppLabs.

Following the transition AppLabs will boast an increased portfolio of
services, encompassing; product testing, product development, offshore testing
and banking, insurance and financial services; retail; utilities; public sector;
technology and telecommunications sector expertise, the statement said.

The merged entity will immediately employ over 1,500 people on three
continents. Headquartered in Philadelphia, PA, USA, AppLabs employs 80 people in
the US, almost 1100 in Hyderabad, India and 300 are based across client sites in
the UK.

The acquisition results in the development of a strengthened management team.
Sashi Reddi, CEO of AppLabs will continue as CEO of the newly merged entity.
Adam Ripley, co-managing director of IS Integration will take up the position of
senior VP of marketing for AppLabs and Clive Grummett, Co-Managing Director of
IS Integration will take up the position as senior VP of AppLabs for Europe.
Gary Davies, currently business development director at IS Integration, will
assume responsibility for worldwide strategic alliances.

Adam Ripley, Co-Managing Director, IS Integration, stated: “The rationale
behind IS Integration's Board decision was its commitment and desire to
continue the strong growth and development of the business. The synergy of this
acquisition affords IS Integration to increase its market share and portfolio,
yet not lose its existing operations, infrastructure or culture.”