On the potential for a Buyout of NetSol Technologies
There are a number of options on the potential for buyout:
-NFS, NetSol's enterprise application suite for the finance and leasing industry generates 80% of company revenues. In addition, 70% of all revenues come from Asia and China, where NetSol now has a 90% market share in the finance and leasing industry. So there are possibilities for a software developer seeking a greater presence in China or a Chinese company that wants a revenue growth stream inside China.
-SAP is a potential fit from two approaches:
First, NetSol currently is an SAP implementation partner and they are developing the SmartOCI procurement search engine for SAP. SAP also has an application package for auto leasing, although not as robust as NetSol's.
Second, we see recent pictures of the CEOs of SAP and NetSol meeting and we have CEO Ghauri now ending his investor presentations with the slide that says, "NetSol Technologies: Ready to be the next SAP for the finance industry."
-While captive finance companies prevail in auto leasing, banks in the past had a large part of auto leasing. Now with used cars going into leasing and the explosion in auto sales in China and India, the banks, with plenty of cheap money to lend, can now reenter. If they want to become a signficant part of auto leasing, as newly installed NFS customer Minsheng Bank of China does, banks might like to come with the full package to support auto leasing and partner with one of the large auto manufacturers. Several of the recent NetSol sales show partnering between auto manufacturers and banks.
-Two years from now, NetSol Technologies will most likely be part of a larger corporation that realizes the value of their software development center in Lahore and its ability to create industry specific software in end to end process application suites. Maybe that's why the three brothers who run the company have purchased 1.3m shares on the open market this year, including 275k at $1.50 per share on December 10.
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