Coforge - Acquisition Of Business Process Management Company SLK Global Solutions: ICICI Direct
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ICICI Direct Report
Coforge Ltd. has entered into an agreement with SLK Global Solutions Pvt Ltd. to acquire a 60% stake in the company for a consideration of ~$122 million (Rs 918 crore) leading to a valuation of approximately three times FY20 enterprise value/sales.
The company will acquire additional 20% over the next two years.
The company will fund the acquisition via debt (~Rs 375 crore or $50 million) and rest through cash.
The acquisition will add ~10% to the company’s topline. We believe it has robust Ebitda and profit after tax margin.
Hence, we expect SLK Global Solutions to be PAT margin accretive.
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