MUMBAI: AppLabs Technologies, a software testing and development services company, has acquired IS Integration, a leading U.K.-based IT and business solutions testing consultancy, for $37 million (Rs. 170 crore).

Together, the merged businesses will create the largest global provider of testing consultancy, with a combined staff base of about 1,500 employees and an estimated revenue and profit of $75 million and $8 million, respectively, in the fiscal year ending March 31, 2007. The transaction is partly funded by UTI Bank, Singapore. Sashi Reddi, founder and CEO, AppLabs, said, "the acquisition positions AppLabs to enjoy a rapid growth in this market, while offering our clients a broader range of services on a global basis.''

In June, AppLabs had received $10 million in funding from Sequoia Capital India and its investment in AppLabs totals $17 million. In April 2005, AppLabs acquired U.S.-based performance testing and certification services company, KeyLabs. Under the scope of the AppLabs-IS Integration agreement, all offices of IS Integration will continue to operate as they are and all staff will remain employed in the U.K. based company. It will effectively form the European arm of AppLabs. While it will continue to operate as IS Integration for the next six months, thereafter, it will operate under the name AppLabs.

The merged entity will employ 1,500 people across three continents. Headquartered in Philadelphia, AppLabs employs 80 people in the U.S., about 1,100 in Hyderabad and 300 across client sites in the U.K.

AppLabs has announced its aim to employ an additional 600 professionals by the year-end to give a total staff base of over 2,000.

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