Ness Technologies (Nasdaq: NSTC) is expanding its activity in Eastern Europe. Today, the IT solutions and services company announced that it had signed a definitive agreement to acquire Radix Company SA, a privately held IT company based in Romania for €4 million (approximately $5.2 million).
In addition, should Radix achieve certain performance goals over the next two years, Ness will pay an additional amount of up €3 million (approximately $3.9 million).
The acquisition is expected to close by April 10. Ness's announcement said that Radix generated revenue in excess of $12 million in 2004 and was profitable.
This is Ness Technologies' first acquisition since it was floated on Nasdaq last year. The flotation raised $90 million net for the company, and at the end of 2004 it has a total of $104 million. It is expected to use the money to make further acquisitions outside Israel.
According to Ness, Radix is one of the leading Romanian IT services and solutions providers, and is expected to provide synergies with Ness' current operations in Central and Eastern Europe. It has partnerships with SAP and Microsoft, as well as other leading vendors, and provides a variety of solutions, including ERP implementation services, content management as well as decision support solutions and work flow automation. Ness said there was growing demand for IT services and solutions in Romania, a member nation of The North Atlantic Treaty Organization (NATO), which is seeking European Union (EU) membership in 2007.
"The Radix Company SA deal meets the strategic criteria for such an acquisition: the ability to leverage our position through a highly-skilled local management team, an acquisition which is immediately accretive to Ness and low integration risks, all complemented by the further expansion of our position in Central and Eastern Europe," said Ness Technologies president and CEO Raviv Zoller.
On completion of the acquisition, Radix Company SA will change its name to Ness Romania and will operate as a wholly-owned subsidiary of Ness' Dutch subsidiary, Ness Technologies, B.V. Radix president and CEO Gabriel Mardarasevici will serve as managing director of Ness Romania and will report to Ivan Hruska, president of Ness Europe.
Published by Globes [online], Israel business news - www.globes.co.il - on March 28, 2005