MOSL: TEAMLEASE SERVICES (Buy)-TeamLease to acquire IT staffing biz of eCentric Solutions
TeamLease Services: TeamLease to acquire IT staffing biz of eCentric Solutions
(TEAM IN, Mkt Cap USD0.7b, CMP INR2794, TP INR3400, 22% Upside, Buy)
TeamLease Services (TEAM) has announced the acquisition of eCentric Solutions’ IT staffing business, which has 880 associates and revenue of INR450m (as of FY18). The company will pay 4.5x PBT (~INR150-180m) or the acquisition through its subsidiary TL Digital by way of slump sale on a going-concern basis. The consideration will be payable in two tranches, on transfer of clients and transition support.
About eCentric Solutions
- eCentric is a Hyderabad-based HR services and IT solutions provider. It has 2,000+ associates.
- Operating since 2014, the IT staffing vertical has over 100 core employees and 880 associates deployed across 20+ clients, with annual turnover of over INR450m.
- eCentric has established itself as an IT staffing business and a tier 1 vendor with top IT clients. Most associates have niche skills and cater to captive clients.
About the transaction
- eCentric will transfer its IT staffing vertical to TL Digital by the way of slump sale on a going-concern basis, at a consideration equivalent to 4.5x of the proportionate PBT (which should work out to ~INR150-180m, depending upon the full fiscal FY19 performance. The consideration is payable in two tranches- 85% on transfer of clients contributing at least 90% of the gross margin and 15% payable post six months of transition support.
Teamlease Services Ltd. Teamlease Services Limited is an India-based company engaged in employment activities. The Company operates as a temporary staffing company and provides human resource services to various industries. Its segments include Staffing Operations, Recruitment Operations and Training Operations. Its services include Temporary Staffing or Temping, Recruitment Services, Regulatory Compliance Services, Retail Learning Solutions (RLS), Institutional Learning Solutions (ILS), Apprenticeship Program (NETAP), TeamLease Skills University and Payroll Processing. It works across industry verticals, including consumer durables, retail, telecom, chemical, e-commerce, pharmaceuticals and healthcare sectors. Its permanent recruitment business is supported by its Candidate Lifecycle System technology platform. It offers training programs in information technology (IT), finance and retail. Its institutional learning solutions business provides skill development services under various Government schemes.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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