FPT spent $30 million acquiring American technology consulting company
By Tran Anh
July 15, 2018 | 08:43 AM GMT+7
Intellinet Consulting, an American management consulting and technology services firm has recently signed a contract to sell 90 per cent of its stake to FPT Group, the largest information technology service company in Vietnam.
FPT Group signed a contract to purchase 90 per cent stake of Intellinet
According to Nguyen The Phuong, Vice General Director (CFO) of FPT, this deal was worth about $40 million to $50 million.
First part of the deal worth $30 million was paid to Intellinet Consulting’s shareholders and the rest will be paid by FPT based on Intellinet’s performance for the next three years.
Based on the statement of FPT’s leaders, the reason of FPT for not purchasing 100 per cent stake was a request of Intellinet. This company want to retain 10 per cent stake to jointly develop and enjoy the achievements of the firm in the future.
Founded in 1993, the headquarter of Intellinet is placed at Atlanta, USA. This company operates in the field of technology consulting with the expertise of 150 professionals. Last year, Intellinet’s turnover reached $30 million.
The company is also considered by Consulting Magazine to be one of the fastest growing technology consulting firms in the United States (US), based on the company’s revenue for the period 2013-2016 with a growth rate of around 25 per cent annually.
This deal will surely help FPT improve its technological position, making the Group become a more comprehensive technology services partner with higher value for customers from strategic consulting, designing, implementing, to maintenance, especially in digital conversion projects.
At present, U.S. is the FPT’s second largest software export market, just after Japan. In particular, FPT gained $50 million in this market in 2017, an increase of 17 per cent compared to 2016.
The Group also expects that this cooperation may further improve its operations in the US market.
According to FPT Chairman Truong Gia Binh, Intellinet currently has about 200 clients, 17 of whom are in the Fortune 500 list while FPT has over 400 clients, 80 of whom are also in Fortune 500, yet most of their clientele is differed from each other.
Prior to this deal, FPT is estimated to gain a revenue of $65 million in 2018 but upon the completion of this contract, FPT’s revenue is now expected to reach roundly $100 million.
FPT's representative in Atlanta said that the company's pre-tax profit margin of digital conversion field is currently around 17 per cent and it will increase to around 20 per cent in the next 12 months.
After divesting from the wholesale and retail sectors, software export is one of FPT's key growth drivers. In the first five months of 2018, software export turnover of FPT reached nearly $125 million, an increase of 27 per cent compared to the previous year, accounting for 34 per cent of FPT’s total revenue.
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