Zensar divesting Australia, West Asia and India businesses
News | 23 Jan 2019
Zensar entered into an agreement with Lorhan IT Services, a wholly-owned subsidiary of First Tek, a US-based information technology services and products company, to divest its Australia, West Asia and India-based businesses.
Zensar Technologies is divesting its wholly-owned subsidiaries that are operating businesses in Australia and West Asia. It is also divesting its India business comprising clients headquartered in India. Zensar entered into an agreement with Lorhan IT Services, a wholly-owned subsidiary of First Tek, a US-based information technology services and products company, to divest its Australia, West Asia and India-based businesses.
India business is being sold as a going concern on slump sale basis while the Australia and West Asian businesses will be transferred by way of a share sale. As per the deal, the identified assets, liabilities, staff, and client contracts relevant to these businesses will be transferred to Lorhan. The deal involves an upfront consideration of `17.50 crore and `8.45 crore subsequently on closing conditions and payment milestones.
Sandeep Kishore, chief executive and managing director, Zensar Technologies, said in the First-Tek group, they found the right partner for their Australia, West Asia and India businesses. Zensar would focus on its hi-tech manufacturing, retail, and insurance verticals in their core markets of US, Europe and South Africa, he said. These markets which together account for 98% of Zensar’s consolidated revenues as on December 31, 2018.
Equirus advised Zensar to divest its non-core businesses and were sole advisor to the transaction. Ajit Deshmukh, MD and head of investment banking, Equirus Capital, said this divestment by Zensar of its non-core business would help them focus on the overall growth strategy.
Kumar Bhavanasi, president and CEO, First-Tek, said his company was looking to expand operations in Australia, West Asia and India and Zensar’ s operational base and the skills complemented their growth strategy. The Zensar stock was down 5.23 % on the BSE on Tuesday. Zensar reported a 40% drop in net profit for Q3FY19 on a marginally rising revenue of `1,035 crore.