New York-based India Equity Partners is set to acquire a 25% stake in IL&FS Education and Technology Services (IETS) for little over Rs 140 crore.
IETS is an education and cluster development initiative of Infrastructure Leasing & Financial Service (IL&FS). Two officials, involved in the deal, said on the condition of anonymity, the private equity firm would pick up nearly 20% in secondary sale by the three existing partners and 5% will be acquired through fresh issue of shares by IETS.
Orix Corporation of Japan, HDFC and Sera Fund are divesting their entire stake in favour of India Equity Partners, said a senior executive.
The current paid-up capital of IETS is Rs 32.31 crore, comprises of 3.23 crore equity shares of each. A senior executive involved in the deal said on the condition of anonymity India Equity Partners was picking up stake at Rs 175 per share resulting into a total valuation of Rs 560 crore.
Both the company is expected to make the announcement shortly, said a senior executive. The education sector is going to be very exciting in India, said head of a private equity, who has also explored the possibility of investing into the company. “Given the growth rate and huge opportunities, the sector would witness a large numbers of mid-size transactions,” he added.
Sid Khanna, chairman and managing director of India Equity Partners, refused to comment. Despite several attempt, IL&FS chairman and managing director Ravi Parthasarthy could not be reached.
IETS is at present engaged in the business of commercialisation of technology-enabled learning and teaching solutions, including web-based multimedia, educational software packages, trade in technology-based products and publication of educational material, development and sale of content and software development and maintenance of information technology-related systems, including training, project management and consultancy in respect thereof.
Though financial details of IETS were not available, a senior executive said the company has reasonable revenues and was also making operating profit. Besides education business, IETS is also engaged in cluster development. In order to consolidate the group education initiative, IETS has acquired cluster initiative of IL&FS recently.
Cluster Development Initiative (CDI) was started as a strategic business unit within IL&FS with the objective of undertaking the cluster development programmes across industry clusters. The initiative is aimed at enhancing the competitiveness of small and medium enterprises (SMEs) through a cluster-based public-private partnership (PPP) approach.
The company has trained 50,000 people in various cluster in the past two years. It aims to train 50,000 people annually. The company is also working on public-private partnership and planning to enter into higher education also, said an official.
Source: Economic Times