Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : iGATE(IGTE) -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (356)	3/7/2000 9:22:00 PM
From: Mohan Marette	Respond to of 380

" We are creating a keiretsu of e-services companies.." Ashok Trivedi Mastech Unveils Plans to Become E-services Co. Silicon India News Bureau Tuesday, March 07, 2000 By Bala Murali Krishna Mastech Corporation is reinventing itself for what it calls the e-Services era. The company's founders, Ashok Trivedi and Sunil Wadhwani, today unveiled a plan to split the company initially into nine operating subsidiaries, four of which are totally new, and also renamed the company iGate Capital Corporation. "We have taken some really bold steps and transformed Mastech and fundamentally changed the business model of the company," Trivedi told siliconindia. But what ignited iGate shares, which now trade on the Nasdaq under the new symbol of IGTE, was the announcement of a $75 million venture fund, iGate Ventures, which adopts the business model of hugely successful incubator companies CMGI and Internet Capital Group. "We are creating a keiretsu of e-services companies that will build on their core competencies and also leverage off each other's strengths," Trivedi said. The company proposes to add $300 million to the fund and spin off six units into separate public companies by the end of this year. In Nasdaq trading, iGate shares rose almost 50 percent to close at $64.18. Mastech's founders first posed the strategic change six months ago because they thought "the Internet revolution is only beginning" and raced to put it in place three months ago, Trivedi said. The nine operating subsidiaries are: 1. Emplifi Consulting (enterprise Web integration) 2. Mascot Systems (Web-focused offshore services) 3. Enterprise Network Solutions (network consulting 4. eJiva (customer care/Internet trading) 5. Symphoni (Web marketing) 6. IRG Inc (business intelligence/information data management) 7. iGate Europe (Web integration services) 8. iProcess (Web-based business process outsourcing) 9. Extranet (e-vendor management) The overall e-Services market is projected to grow from $13 billion in 1999 to almost $80 billion by 2003. iGate, of Pittsburgh, is a global corporation with operations in five continents. Last year, it reported revenues of $470 million.

To: Mohan Marette who wrote (356)	3/7/2000 9:22:00 PM
From: Louis Riley	Read Replies (1) \| Respond to of 380

March 7, 2000 Tech Center Mastech Plans to Split the Company Into Several Firms, With Goal of IPOs By TIMOTHY AEPPEL Staff Reporter of THE WALL STREET JOURNAL OAKDALE, Pa. -- Sunil Wadhwani and Ashok Trivedi built a thriving business around the notion of importing people, largely from their native India, to fix American computer systems. Their company, Mastech Corp., grew into a $470 million-a-year powerhouse and the partners are now quite rich. But that business isn't good enough any more. So beginning Tuesday, the company is blowing itself up and creating nine separate operating companies to be eventually publicly traded -- each designed to deal with one aspect of Internet-related services. Mastech will rechristen itself iGate Capital, a holding company that will link the nine together. Furthermore, Mastech is looking at its main non-Internet related business, the staffing operation it began with, which constitutes about 35% of its revenue. Mastech is considering a management-led buyout, a combination with another company or an outright sale of that business. For the moment, it will remain a unit of iGate. "The Web revolution is driving e-services to the top of the value chain -- so that's where we have to be," says Mr. Wadhwani, the company's 47-year-old co-chairman and chief executive. One of the new companies will be devoted to Web-based marketing and another to Web integration. Mastech is only the latest computer-services concern to attempt such a reincarnation. For instance, Ciber Inc. and Computer Horizons Inc. both recently announced moves aimed at creating businesses focused on the Internet. Analyst Steve Ashley, at Robert W. Baird & Co., says the underlying issue is valuation. Wall Street loves pure-play Internet services companies. A Ferrari Among Chevys Companies like Mastech have attempted to build up lucrative Internet services, both internally and through acquisitions. "But if you have a Ferrari in a fleet of Chevys, you still get a valuation based on the fleet of Chevys," says Mr. Ashley. Messrs. Wadhwani and Trivedi have bought or developed five Internet-focused companies, including one called eJiva, which works on certain aspects of business-to-business e-commerce. Another four Web companies will be carved out of Mastech's existing operations. The goal is to ultimately spin all these companies off through initial public offerings. "We'll make lots of people very rich," says Mr. Trivedi. Indeed, a major reason for the IPOs will be to help the new companies compete for talent in a tight job market by offering compensation packages heavy with stock options. 'There's High Anxiety' Sitting in a conference room at the company's headquarters near Pittsburgh, carved out of a building that was once part of Westinghouse Electric Corp., Mr. Wadhwani says he expects the Internet-services market to continue growing rapidly. "There's high anxiety at the top management levels of big companies these days," he says. They are worried about the impact of online competitors and looking for consultants who can quickly and effectively bolster their positions in the market, he adds. Mastech, which trades on the Nasdaq Stock Market, has a market capitalization of about $2.19 billion. The businesses under the iGate umbrella will each have its own management and board. The holding company will have majority stakes in most of the companies, and iGate shareholders will have the ability to buy shares in the IPOs at favorable terms. Write to Timothy Aeppel at timothy.aeppel@wsj.com1 -------------------------------------------------------------------------------- URL for this Article: interactive.wsj.com Hyperlinks in this Article: (1) mailto:timothy.aeppel@wsj.com -------------------------------------------------------------------------------- Copyright ¸ 2000 Dow Jones & Company, Inc. All Rights Reserved.