Software developer InterObject bought by US co

GlobalLogic reportedly paid $10 million for the Israeli software developer.

GlobalLogic Inc. of the US has acquired Israeli software developer InterObject Ltd. The companies did not disclose the size of the deal, since they are both private firms, but sources inform ''Globes'' that it totaled about $10 million. InterObject is headquartered in Israel and has R&D centers in Lviv and Kiev in Ukraine.

InterObject CEO Eli Schwarzfuchs and R&D manager Alex Agizim founded the company in 2000. The company develops embedded software, mobile and multimedia streaming products. It has been profitable since 2004, reportedly making $8 million a year in revenue, and has not needed outside financing. It has 250 employees at its Ukraine R&D centers, and its acquisition will turn it into the largest offshore IT services company in Ukraine.

InterObject's customers include Eastman Kodak Company (NYSE: EK), BigBand Networks Inc. (Nasdaq:BBND), Metalink Ltd. (Nasdaq: MTLK;TASE: MTLK), Radvision Ltd. (Nasdaq: RVSN; TASE: RVSN), and Zoran Corp. (Nasdaq: ZRAN).

GlobalLogic employs 3,000 engineers, two-thirds of whom are in India, and one third in Ukraine. The company provides global product development services, especially embedded and mobile products. The acquisition of InterObject is the company’s third acquisition this year, following Chinese firm Dalian 3 CIS and Ukrainian firm Validio Software.

GlobalLogic CEO Peter Harrison said, “We have been looking for the right company to help us meet the rising demand for software R&D we see in Israel’s booming technology sector. InterObject is ideal since it is already well-established in the competitive Israeli market, with a large team of Ukraine-based engineers who are experienced in our areas of specialization, like embedded and mobile product development."

:Globes": Why sell the company?

Schwarzfuchs: "The truth is that negotiations have been underway for several months, and now more than ever. We made the right decision in view of the global situation. I believe that hard times are coming for mid-sized companies in our business."

Schwarzfuchs added that large companies outsource software projects in hard times, but want sound contractors. "When a company outsources a development project involving 50 to 70 employees, it must have assurance that the contractor can carry out the job. It's not possible to place 20% of a project of a large company with a small and unstable one. We now have a sufficiently large group of engineers to handle the largest accounts. InterObject was a private company that never obtained investment from outside investors. We needed more capital to grow."

Published by Globes [online], Israel business news - www.globes-online.com - on October 22, 2008

© Copyright of Globes Publisher Itonut (1983) Ltd. 2008

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