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Sikh-owned tech firm secures
$100M investment
WSN Bureau
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The cash comes
via a New
York
private equity firm, Tailwind Capital Partners, which will both
invest in Optimal and arrange financing for it |
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DALLAS:
Optimal
Solutions Integration Inc., an Irving technology services and
staffing firm, has arranged for up to $100 million in financing to
fund the planned quadrupling of the company's revenue.
The cash comes
via a New
York
private equity firm, Tailwind Capital Partners, which will both
invest in Optimal and arrange financing for it. Tailwind has already
injected an undisclosed sum into Optimal, and has now taken a
majority ownership stake in the business.
"We're not happy
with 20% to 25% growth" in revenue, says Gurvendra Singh Suri,
Optimal's CEO. "We're looking to be (fourfold larger) in three
years."
That would
entail growing the company's 400-person worldwide staff to closer to
1,200 to 1,600 people through 2010, assuming that everything
proceeds as planned, according to Suri.
Frank Sica,
managing partner at Tailwind, says the $100 million figure is
necessary to hit the aggressive growth plans. "That's the magnitude
of what we think we will need to build the business."
Optimal, which
has been in business since 1995, does consulting for software made
by Europe's SAP. It has grown to $56.4 million in revenue (for 2007)
serving Fortune 500 companies like Dell Computer and Texas
Instruments.
The growth
opportunity Suri sees is in providing consulting services to
mid-sized businesses for SAP technology in a type of software called
"enterprise resource planning," or ERP for short. ERP software helps
run and tie together most major departments of a business, such as
accounts receivable and payable, purchasing, warehousing and
manufacturing.
The ERP market
in large companies is generally viewed as saturated, which has made
mid-sized businesses the next major target of software makers like
SAP and its chief rival Oracle.
SAP, which
defines mid-market companies as having up to $1.5 billion in
revenue, estimates there are about 1.2 million such businesses
worldwide. That gives the middle market a value of about $36
billion, the company says.
The Tailwind
investment allows Optimal to jump feet-first into the middle market.
"We're starting a new line of business," Suri says, adding that the
company's work with large firms will continue unabated.
The cash will go
toward building out the company's infrastructure to enable it to be
a much larger organization, along with growing its management team
and acquisitions, among other things. Suri says Optimal is looking
at two deals right now, although it's unclear when, or if, a
transaction might transpire in either case.
Suri says
Optimal is up to the challenge. "I don't think anybody can stop us,"
he says. (Dallas
Business Journal)
21
May,
2008
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