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Our Bureau

Pune , Nov. 16

OUTSOURCED software development company Persistent Systems has announced the acquisition of the Goa-based ControlNet India, a 100 per cent subsidiary of the ControlNet Inc, California, in an estimated $2 million (Rs 9 crore) deal.

The acquisition will provide the company an entry into the high growth embedded systems and application specific integrated circuit design (ASIC) space.

"The acquisition is part of our expansion strategy that enables us to enhance our business and technology expertise. Gaining expertise in embedded systems serves as a value adjunct to our product lifecycle and development services, especially in the telecom and datacom domains which are key drivers in Persistent's plans,'' the Chairman and Managing Director, Mr Anand Deshpande, said.

He also announced plans to grow its business by setting up a new facility in Pune to accommodate 2,500 people by March next year.

The acquisition, meanwhile, gives the company the opportunity to tap the embedded systems market, one of the main drivers of Indian R&D offshoring, and currently valued at an estimated $25 billion globally.

ControlNet's Indian operations specialise in network protocols, security, voice-data collaboration and convergence with capabilities in ASIC design, software development and product engineering. It currently has a team of 100 people which will be ramped up to 250, according to Mr Deshpande.

"We expect revenues of $3-5 million from the Goa centre by next year'', Mr. Deshpande said.

Meanwhile, the company, which closed fiscal 2005 with revenues of $33 million, will cross the $50-million mark in 2006, according to Mr Deshpande who also said growth will also come in its US operations, Persistent Systems Inc which has grown from a 40-member team in sales and support to over 70 in the last few months.

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