Bangalore-based Symphony Services Corp, a global software product engineering services company, has acquired CoreObjects Software Inc, a Los Angeles-based new product development services provider that specializes in bringing commercially deployable products to market. This is the second acquisition for the company in 2010. Earlier in June,it acquired Bangalore-based outsourced product development firm Proteans Software Solutions.
The deal vividly represents the significance Indian software companies attach to access to US market. The testimony to this fact is the growing number of US-bound acquisitions by Indian companies in the first half of 2010, accounting for 65% of total US-bound acquisitions. With the robust second half performance, stage looks set for high annual M&A activity between India and US. There were 23 US-bound acquisitions by Indian companies with an aggregate value of over $3.8 billion in the first half of 2010. While mid-size companies, such as Prithvi Info Solutions, Integra Software Solutions, Educomp and Cambridge Technologies sought to add new service capabilities (See the table) through US-bound acquisitions, large-size companies, such as Aegis, Aditya Birla Minacs, Rolta, and Glodyne sought to strengthen their current capabilities.
The acquisition of CoreObjects provides Symphony leverage in terms of access to additional re-usable components and frameworks for product development, including CoreObjects’ Smart Objects suite of software assets designed to speed up clients’ products to market and create long-term, high-margin recurring revenue. It also provides Symphony with intellectual property that will help advance client market share in the healthcare sector. The deal also brings on board clients as well as the opportunity to expand client relationships in financial services, life sciences and clean tech.
CoreObjects has engineering delivery centres in Bangalore and Pune. With 55 active client contracts in the US, Europe and India, CoreObjects serves clients building products or revamping existing ones. It has vertical market expertise in areas of automotive, industrial automation, semiconductor manufacturing, media and entertainment, health and wellness, financial services, mobile applications, life sciences and medical devices, networking and clean technology and energy. CoreObjects has a deep presence in providing services to Los Angeles startups; the firm has provided its services to such firms as Stamps.com, Xoova, Practice Technologies, and many others, and reportedly has taken warrants and equity stakes in a number of local startups as part of their development deals. It has received venture funding from Palomar Ventures.
The Smart Objects suite includes Smart Machines, a web-based solution for real-time asset performance management, enabling continuous monitoring and management of industrial equipment, and smart vitals, an early response system to improve patient safety and optimize occupancy in hospitals.
Symphony Services provides software product engineering outsourcing services to Independent Software Vendors (ISVs), software enabled businesses and companies whose products contain embedded software. Presently, Symphony provides services to around 150 clients.
It was founded in 2002 with initial funding from Romesh Wadwhani, Chairman and CEO of Symphony Technology Group and then in 2003 Symphony Services raised growth capital from TH Lee Putnam Ventures.
Symphony Technology Group (STG) is a strategic private equity firm with the mission of investing in and being a partner in building great software and services companies.
TH Lee Putnam Ventures is a technology-focused private equity firm affiliated with Thomas H. Lee Partners, a leading buyout firm, and Putnam Investments, a leading global money management firm.
With the growing M&A Activities by Indian companies abroad and especially in US, the mood seems to be quite bullish and IT is very well positioned to drive this momentum further. With easy access to funds, Indian companies are becoming truly global.