Leading skills and talent development corporation, NIIT’s share price rose by a whopping 12.87% to reach an intraday high of ₹ 331.90 apiece on the National Stock exchange. Its shares were trading at ₹ 324.50 apiece, up 10.36% at 11:53 AM on Monday.
The company on Saturday announced that it has acquired 100% membership interest in St Charles Consulting Group (StC), through its wholly-owned subsidiary, NIIT (USA), Inc. The acquisition happened for a ‘fixed consideration’ of USD 23.4 million (about ₹192 crores), subject to certain adjustments. The definitive agreements provide for payment of annual performance-based earnouts over the next four years.
Founded by two former Arthur Andersen Partners in 2002, St. Charles Consulting Group provides consulting, design, and implementation solutions. Its founders and key team members have served over 12 out of the top 15 global professional services firms.
This acquisition will help NIIT to add a significant presence in the professional services and management consulting space as St Charles’ experience in strategic learning programmes are in high demand. Further, it will help it to strengthen its fast growing consulting practice.
DJ Chadha, Chief Customer Officer, NIIT Limited said that the acquisition of St. Charles Consulting Group will give their customers access to an expanded capability of consulting, designing, and implementing strategic learning programs. It will enable them to engage with their customers on a deeper level to help them attain their strategic objectives.
Larry Durham, President of St. Charles Consulting Group said that the time couldn’t be better for joining forces with NIIT Ltd. He said that both the firms bring complementary learning capabilities and offerings which will allow them to more fully serve their clients and be even more competitive in the marketplace.
NIIT Ltd is a small cap-company with a market capitalization of ₹ 3,954 crores. It has a return on equity of 14.58% and an ideal debt-to-equity ratio of 0.02%. The stock is trading at a price-to-equity ratio (PE) of 20.08 which is lower than the industry PE of 28.83. Therefore, the stock might be undervalued.
Promoters hold a 34.88% stake in the company, retail investors hold 35.64%, foreign institutions hold 21.21%, mutual funds hold 8.01% and other domestic institutions hold a 0.26% stake in the company.
Written by Simran Bafna
