BENGALURU: TeamLease Services said it would acquire the staffing business Hyderabad-based eCentric Solutions through a business transfer agreement as it looks to tap bigger pie of organised staffing for technology sector.
TeamLease Digital, a wholly owned subsidiary of TeamLease and eCentric Solutions signed a definitive agreement on Monday to buy the IT staffing business of eCentric by way of business transfer or slump sale arrangement, said the company in a press release. The IT staffing vertical of eCentric Solutions has an annual turnover of Rs. 45 crore. Operating since 2014, it has employs more than 100 core employees and 880 associates deployed across more than 20 clients.
The transaction is expected to close before the end of April 2019, subject to regulatory approvals, and will be immediately accretive to TeamLease’ earnings per share and be financed with existing financial resources. Payable in two tranches, the consideration for this deal will be equivalent to 4.5 times e of the proportionate PBT (profit before tax) transferred to TeamLease Digital.
“This acquisition is consistent with our strategy of bulking up in our specialized staffing businesses with transactions that add customers, capabilities and human capital. IT staffing is currently our largest specialized vertical and e-Centric’s business not only adds clients but our skill footprint and onboards a great team,” Ashok Reddy, managing director, TeamLease, was quoted in the release.
Stating that India’s IT industry employs 0.7% of India’s labour force but generates about 7% of GDP, TeamLease said it expects the share of organized staffing to go up disproportionately from the current 5% of total IT employment since both service and product companies rethink their delivery models.
The current market size of Indian IT staffing is nearly Rs. 22,000 crore with a headcount of 2.6 lakh employees.
Source: Economic Times