By Shalini Pandey
Recruitment firm Teamlease Services on Monday said it will acquire Pune-based Evolve Technologies for INR 36.68 crore ($5.66 million), a move that will enable it to enter the telecom staffing space. It is the company’s fifth acquisition within 15 months. TeamLease Services and Evolve Technologies have signed a definitive agreement under which TeamLease will acquire 100 percent stake in Evolve through its wholly-owned subsidiary, TeamLease Staffing Services.
“The all-cash acquisition, which will be immediately accretive to TeamLease’s earnings per share, will be financed through existing financial resources,” a company release said. The transaction remains subject to customary closing conditions and regulatory approvals and is expected to close by the end of November 2017. “The acquisition of Evolve is in line with our long-term strategy of expanding our footprint into specialised areas of staffing,” Ashok Reddy, MD, TeamLease Services, said. “We are excited to be associated with Evolve at a point when the IT infrastructure to support the rapidly expanding telecom user base in the country is undergoing a massive change. TeamLease and Evolve will jointly address the needs of our dynamic telecom market and clients,” he added.
Evolve, which posted revenue of INR108.64 crores in the financial year 2016-17, will continue to operate as a separate and independent entity post-acquisition with the same team.
TeamLease, which listed on the bourses in February last year after an initial public offering (IPO) that saw huge investor turnout, has been on an acquisition spree in the past months. In its share sale document, TeamLease had said that it planned to use part of the proceeds from the IPO for acquisitions.
In September last year, the company agreed to buy Bengaluru-based NichePro Technologies Pvt. Ltd for INR 29.5 crore. In July 2016, TeamLease acquired ASAP Info Systems for INR 67 crore to provide recruitment services to IT companies. It had then said that the acquisition would help it expand its footprint in the core IT hiring space. In January this year, TeamLease acquired another Bengaluru-based firm Keystone Business Solutions Pvt. Ltd for INR 8.2 crore. Its most recent acquisition was Cassius Technologies Pvt. Ltd in May 2017.
It had raised more than INR 400 crore in the IPO and said it planned to use around INR 80 crore for existing and incremental working capital requirements, INR 25 crore for acquisitions and other strategic initiatives, and INR 15 crore to upgrade its Information Technology infrastructure.
TeamLease, which has been operating since 2002, mainly offers temping services where it provides temporary workforce to its clients in bulk on a contract. This allows clients to hire without adding to their direct employee base. This employment and business model is closely associated with sectors like manufacturing, banking, BPO and retail, among others. Temping also involves hiring senior level managers on a short-term basis.
Pune-based Evolve Technologies and Services started operations in the manpower augmentation space in January 2010 and has created a niche in the outsourcing and deployment of personnel required for the telecom industry. As on 30 September, the company had provided more than 4,000 associates at client locations. The firm has 150 core employees.
“We are excited by the opportunity to enhance our range of services to existing clients and to expand our client base. The combined platform enhances opportunities for long-term career development for our young and passionate employees,” Amitoj Sethi, Co-founder and Director, Evolve said.
India’s telecom sector has generated a lot of attention over the last one year after Reliance Jio Infocomm Ltd entered the sector. The annual revenue of the telecom sector in India is about INR 2 trillion. It is saddled with a debt of around INR 4.5 trillion. The industry also owes close to INR 3 trillion in spectrum payment charges to the government, according to industry estimates.
“TeamLease and Evolve will jointly address the needs of our dynamic telecom market and clients as technology trends like 4G, 5G, and so on drive the need for rapid and skilled field deployment of advanced technologies to enable the mission of ‘Digital India’,” Reddy said.
TeamLease shares closed at INR 1,610.65 on BSE on Monday, down 0.26% from their previous close. The benchmark index closed at 32,633.64 points, up 0.62%.
Featured Image Source: Google Images