Jindal Photo buys into Coheris

Acquires 15.5% stake in the French firm for €3.5m as an old tax issue resurfaces.

MUMBAI: It was a mixed day for the B C Jindal group company Jindal Photo.

The good news first. Jindal Photo, which has a technical and marketing alliance with Japan’s Fuji Photo Films and is a leading manufacturer of photographic and X-ray films, and photographic paper, has taken a 15.5% stake in France’s Coheris SA, for about 3.5 million euros.

Coheris SA is listed on Paris Stock Exchange, and is in the business of software publishing in the field of customer relation management and business intelligence.

Coheris is a profitable company and had revenues of 27 million euro in FY05. Jindal Photo has acquired the shares from the promoter family of Coheris, who would continue to run the business.

The Rs 1,800-crore group already has business in France. In 2003, Jindal Poly had acquired majority stake in polyester film manufacturer Rexor.

Meanwhile, an old tax issue has come back to haunt Jindal Photo. During the sales tax assessment for the year 2002-2003, the assessing authority at Dadra & Nager Haveli has disputed its local sales and slapped a Rs 23-crore charge towards central sales tax and penalty. The company has appealed against the case.

The B C Jindal group has interests in flexible packaging films, photographic products and iron and steel industries. Jindal Poly Films, the group flagship, contributes about 36% to the group topline, with Jindal Photo contributing 25%, and Jindal India being responsible for 19%.

The Coheris acquisition marks the group’s maiden entry into information technology space.

Although the company completed the acquisition last month, it informed the stock exchanges only Thursday. In a weak market, the Jindal Photo stock closed 5% up at Rs 97 on the BSE.

Coheris is a publisher of seven software packages and also offers consulting, training, integration and trouble-shooting services. It has offices in Belgium, Italy, Switzerland, Germany, Spain and the UK.

For Jindal Films, this acquisition marks an entry in the fast growing IT sector, and for Coheris, this deal opens up the Indian market.

“Coheris will benefit from the international development of the group and from an opening on the Indian market, market which is growing rapidly and in which the Coheris products will have a significant position,” the company said in a statement posted on its site.

Coheris is increasing its focus on software activity (58% of topline in FY05 from 28% in FY04) against services, and hopes to make this segment account for two-thirds of its revenues this year. Its inorganic growth appetite was on display earlier this year when it acquired FDV Concept, a software editor specialised in sales performance and merchandising.