Mumbai, Feb 7 :     BFL Software (BFL) and the US-based Mphasis Corporation (Mphasis) today announced they were forming a common entity in all-stock deal - globally the most preferred option of buying out companies in recent times. BFL will issue 6.5 million equity shares of BFL Software on a preferential basis in exchange for common stock equivalents of Mphasis Corporation. Based on the share price of the BFL scrip - which remained locked in the upper-end circuit filter at Rs 1,348.90 on the BSE - Mphasis has been valued at a whopping Rs 876 crore. The board of directors of BFL is meeting on February 14 to consider the proposal, a company release said. Jaithirth (Jerry) Rao, one of the promoters of Mphasis, will be the chairman of the merged firm. Rao had earlier headed Citibank's development division and Transaction Technology Inc. Barings, which holds 52 per cent of BFL's paid-up capital, is also an investor in Mphasis. As a result, it will continue to control a significant chunk of equity in the combined entity. 'The deal offers a wealth of synergies to the combined entity by bringing together the front-end capabilities and marketing expertise of Mphasis. This will be complemented by economies of scale arising from BFL's well-established operations,' a joint release issued by Mphasis and BFL stated. BFL is a software services company which earns about two-thirds of its revenues from off-shore development. Based in Bangalore, BFL delivers software services and products to its international clients, which include an array of Fortune 500 companies. Mphasis investors include Barings and Richard Braddock, CEO of Priceline.com, director E-Trade, and chairman of the Mphasis advisory board. It has raised funds in the US with significant investments by venture capital firms. Mphasis has special domain expertise in the financial vertical section, an area which has one of the highest IT spends. The internet and e-commerce shares of this segment is expected to grow exponentially and the combined entity is well positioned to take advantage of this opportunity, the joint release said..