Gemini Communication acquires major stake in Veeras

In what is considered to be one of the major acquisitions in Chennai, Gemini
Communication acquired a majority (51 percent) stake in Chennai-based security
and availability solution provider Veeras Infotech. The deal, valued at around
Rs 7 crore is funded through internal accruals of Gemini Communications.

Veeras Infotek is a strategic addition to Gemini Communication's network
security business. The acquisition is said to extend the network security and
business continuity capabilities and increase the company's client base. Veeras
Infotek's work in the areas of virtualization, collaboration, business service
management, information security and business continuity is said to have
attracted Gemini.

“The addition of Veeras Infotek will advance Gemini's vision of becoming a
major player in network security space,” said Ram Kumar, Executive Director,
Gemini Communications Ltd. On the inherent value that made Gemini acquire Veeras
Infotech, Kumar said, “Gemini Communications is also doing significantly well in
network security space. In the network security, availability and virtualization
space, together we can address a larger market value. We have to grow to beat
the likes of big companies in the networking market. We have to scale up to a
certain level but that cannot be organic and hence Gemini acquired a stake in
Veeras Infotech.”

Speaking on the value additions that Veeras Infotech would bring into Gemini,
he mentioned that Veeras Infotech has been in the security area by dealing with
major anti-virus software for the past 15 years. “This move will complement both
the companies to move and grow together. Once Veeras Infotech becomes our
subsidiary, the addressable size that we are doing today will become much more
big,” Kumar averred.

He also said that the Rs 7 crore that was offered to Veeras Infotech was
primarily based on their bottomline revenues earned YoY. “The valuation was
completely based on the value that the company brings in terms of the skillset,
management and experience. There are quite a lot of people who have spent
considerable amount of time in Veeras Infotech. When these are all put together,
it brings in lots of value to Veeras,” he commented.

Speaking about the acquisition, Sudarsan Ranganathan, CEO, Veeras Infotek,
said, “This is an exciting milestone for our company, and we look forward to
scaling our growth as part of Gemini Communications.”

Ranganathan said that this move was taken keeping the company's growth in
mind. “Being a Rs 50 crore company, it is very hard to grow to a Rs 200 crore
company. Only through such moves of divesting the stakes can we move ahead in
terms of growth,” he claimed. He also said that with the guidance of Gemini
Communications, the market approach would be more refined. “The guidance of
Gemini will help us to focus on special areas and grow together. It will also
help us become a leader in the market,” Sudarsan said.

Veeras plans to invest the money obtained through dilution into geographical
expansions. “We will use the money for expanding our presence geographically and
investing in human resources apart from investing in functional expansions,”
Sudarsan averred.

He foresees this as an opportunity to be a part of Gemini Communication's
global reach, scale, widely recognized brand and customer relationships. “Our
combined teams will create exciting growth opportunities for Veeras Infotek and
our customers. We look forward to the association with the Gemini
Communication's team,” he added.