Nordic IT services vendor TietoEnator is set to acquire Fortuna Technologies, an Indian R&D provider, in a deal valued at 21m euros ($29m).
Hyderabad-based Fortuna, which has around 300 staff, specializes in developing applications for mobile devices. As well as two centers in India, the company has an operation in Malmo, Sweden, supporting its work with Ericsson. Fortuna’s other customers include technology manufacturer Sharp, Sagem Communication, and mobile software developer Celunite.
TietoEnator has made a number of moves in recent years to grow its telecoms R&D operation. In June this year, the company acquired the R&D operation of Nokia Siemens Networks, following up a move 12 months previously for RTS Networks, a Polish player with strong ties to Siemens.
As of May 2007, TietoEnator had around 300 staff in India, located at a center in Pune. Services provided from the region include product development, systems integration and user interface design.
This is a significant purchase for TietoEnator, almost doubling the company’s headcount in India. It is another sign that the company is serious about utilizing global delivery models to reduce costs.
Earlier this week, TietoEnator confirmed that it would most likely miss its own full-year earnings targets, an admission the company first made back in July. Then, TietoEnator blamed high labor costs in the Nordic region, and insisted that it was looking to move more work to low-cost locations.
Last month, the company announced that it was centralizing its service desk operations supporting Nordic clients in a single facility, to be located in the Czech Republic. Ultimately, TietoEnator aims to have 40% of its workforce based in low-cost locations, although this target remains some way off. At the end of June, some 15% of total headcount was located in offshore and nearshore locations.
TietoEnator’s strategy in recent times has been to grow in attractive areas through niche acquisitions. Indeed, Fortuna is the 14th company to be taken over by the Finnish giant in the last two years. It would be reasonable to expect that TietoEnator will continue to pursue its offshore ambitions in similarly aggressive fashion.