To fund the acquisition, i-flex says it is selling 4.45 million shares to its majority shareholder Oracle for $125 million. The deal raises Oracle's holding in the Indian core banking firm to 55.1% from 52.5%.

As required by Indian law, Oracle will additionally make a mandatory open offer to purchase up to an additional 20% of the shares outstanding from the remaining i-flex shareholders. At Rs1475 a share, the offer values i-flex at about $2.4 billion, a 70% premium to Oracle's initial investment.

Virginia-based Mantas was spun off from SRA Ventures, a joint venture formed by Safeguard Scientifics and SRA International, in May of 2001. Mantas later merged with Sotas, a provider of analytical technology to the telecoms industry, in October 2003.

The vendor's 'behaviour detection' technology is used by banks including ABN Amro, Barclays Capital, Charles Schwab, Citibank, Merrill Lynch, and Credit Suisse to identify risk and address AML regulations.

Rajesh Hukku, chairman and managing director, i-flex solutions, comments: "Through our acquisition of Mantas we gain access to an industry-leading behavior detection and compliance solution, coupled with deep financial services industry expertise."

Mantas last week inked a deal to become an Oracle database reseller under an initiative to deliver a one-stop shopping experience for regional and community banks in the market for database, compliance and risk management technology.

The tie-up with i-flex comes two months after private equity house Warburg Pincus acquired Mantas rival Searchspace and merged the operations with Semagix - a provider of know your customer and due diligence products - in an effort to staisfy industry demand for more rounded compliance solutions.