Kanbay International details IPO
Technology services firm Kanbay International Inc. on Tuesday provided details of its planned initial public offering (IPO), the proceeds of which will be used to expand the outsourcing company's operations in India.
The Rosemont-based company expects to offer 7.15 million shares at $13 to $15 each. Kanbay estimates it will receive net proceeds of $66 million from the offering and will use $45 million to build a delivery center in Hyderabad, India, and expand its existing center in Pune, India.
A date for the IPO has not been set. Kanbay officials were not available to comment Tuesday.
Kanbay designs computer systems that track customer payments and information for the insurance, banking and consumer lending industries It's the largest outsourcer in financial services, with clients like Britain's HSBC Holdings plc and New York-based Morgan Stanley & Co.
The company's plan for additional ventures abroad is not without risks, Kanbay warns in public filings. “Negative public perception in the United States regarding offshore IT service providers and recently proposed federal legislation may adversely affect demand for our services,” the company noted in a July 2 Securities and Exchange Commission (SEC) filing. Economic factors such as increasing wages in India and fluctuations in currency exchange rates also could contribute to the risks of such an investment, Kanbay said.
The 15-year-old company has 2,300 employees worldwide and posted net income of $11.1 million on a record $107.2 million in sales last year. Much of Kanbay's growth has come from the IT outsourcing company trend among U.S. companies seeking to cut costs by using technology service centers that operate offshore, mainly in India.
The majority of Kanbay's workforce, or about 1,805 employees, is based in India and the work done there accounted for about half of its revenues last year.
Kanbay has applied to have its shares listed on Nasdaq under the ticker “KBAY.”
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By Julie Jargon
Chicago Business
