NIIT Tech buys 51% stake in Incessant
Mid-sized IT firm NIIT Technologies on Tuesday announced acquisition of 51 per cent stake in Hyderabad-based Incessant Technologies for about $17 million (about Rs 107.8 crore).
A dispute had arisen between one of the company's subsidiaries and its client in the APAC region. "The dispute was resolved by concluding a settlement agreement which released the company of its obligations towards execution of the programme," NIIT Technologies Chief Executive Officer Arvind Thakur told reporters here.
The financial impact of this one-off event during the quarter is Rs 80 crore, he added. Its consolidated revenues rose 3.9 per cent to Rs 611.2 crore in the reported quarter as compared to Rs 588.5 crore in the year-ago period. Betting big on the digital space, NIIT Technologies has acquired 51 per cent stake in Hyderabad-based Incessant Technologies for about $17 million. "The focus going ahead will be on the digital space and that is why we are acquiring 51 per cent stake in Incessant. It is a strategic move for us to grow in the digital space," he said. He added that the target company is about $17 million in size and NIIT "would be investing the same amount for 51 per cent stake".
"NIIT will go on to acquire the company (by) 100 per cent over a period of time," Thakur said, adding that Incessant has about 300 employees and 20 significant clients. Digital business currently contributes about nine per cent of NIIT
Technologies' revenues. The company reported a net loss of Rs 17.5 crore for the March 2015 quarter as compared to a net profit of Rs 61.9 crore in the year-ago period on account of a one-time settlement charge of Rs 80 crore.