IBM to acquire Indian services company

IBM announced on Tuesday that it plans to acquire Network Solutions, an infrastructure services company in Bangalore, India.

IBM will acquire the entire equity capital of Network Solutions, making it a wholly owned subsidiary, the company said. It did not disclose other financial details of the deal.

The objective of the acquisition is to strengthen IBM’s networking and managed services business for the Indian market, said a spokeswoman for IBM, of Armonk, New York. The transaction is expected to close within a month.

Set up in 1993, Network Solutions installs WANs (wide area networks) and LANs, including converged data, voice and video networks. It also offers infrastructure management and network design services.

The privately-held company has been profitable for the past 12 years, said Sudhir Sarma, its managing director. The current organization and management of the company will remain after the acquisition, he added.

“We have not decided to cash out, but rather we think this is the best way to take our business to the next level,” Sarma said. There are complementarities in the markets that IBM and Network Solutions address in India, he added.

Intel, which was an investor in Network Solutions through Intel Capital, its venture capital arm, exited Network Solutions after it acquired the network consulting business of the company in 2000. ” As Intel in India exited some of the lines of business, we built again a network consulting group within the company,” Sarma said.