Under the terms of the proposed deal, EDB will pay $3.8m for an initial 50.1% stake in Span, with an option to buy up the remaining shares after three years. Span’s current management has agreed to stay on following completion of the transaction, when Span will operate as an independent subsidiary within the EDB group.

Founded in 1993, Span employs approximately 550 staff at three centers in Bangalore. The company specializes in providing application development and management services to financial services institutions and reported annual sales of $7.8m in its most recent fiscal year. Some 80% of this revenue is derived from customers in the US, with the remaining 20% generated in the Nordic region.

The move for Span will increase EDB’s headcount in low-cost locations to about 1,200, representing 23% of the company’s total number of employees. By the end of 2010, EDB plans to have one-third of its workforce in either nearshore or offshore locations. At present, nearshore services are delivered from Ukraine, where EDB has built up a workforce of around 600 staff following the recent acquisitions of local players Infopulse Ukrania and Miratech.

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EDB’s proposed acquisition of Span comes just over a month after the company’s Nordic rival, TietoEnator, announced plans to double its Indian headcount to over 600 by buying local R&D provider Fortuna Technologies. In the long term, TietoEnator plans to have 40% of its workforce in low-cost locations, which includes nearshore centers in countries such as Russia and the Czech Republic.

The Nordic IT services vendors have, in general, been hesitant about adopting a global sourcing strategy. However, their hands have been forced somewhat over the last year or so by what EDB described as a Nordic labor market characterized by high costs and a shortage of resources.

It remains to be seen whether other Nordic players will follow the example of EDB and TietoEnator and develop their offshore capabilities. Ementor last week restated its intention to focus on local purchases, while the region’s other acquisitive companies, including Acando, TeleComputing, and Mondo, have all preferred to consolidate their Nordic businesses during 2007.