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NIIT Tech promoters mulling exit: Sources
IT sector consolidation seems to be hotting up. CNBC-TV18's Kritika Saxena learns that the promoters of NIIT Tech may be looking at exit opportunities.
IT sector consolidation seems to be hotting up. CNBC-TV18's Kritika Saxena learns that the promoters of NIIT Tech may be looking at exit opportunities.
They are looking at an exit and valuation of around 4 to 5 times EBITDA. Therefore, valuation is a little bit of a problem here.
Sources say the promoter of the IT education company have invited bankers for the sale. They have spoken to around six bankers. By the end of this week, they want to finalise around two bankers to create a formal mandate for the sale.
With order books shrinking and global environment as it is, IT sector was always a prime candidate for consolidation. Earlier, we had seen Hexaware looking at an exit. Aptech IT and Education looking at an exit but the valuation had been slightly low.
CNBC-TV18 understands that there have been couple of global IT players that have been looking at Hexaware as well as NIIT together -two midcap players that are reportedly on the block. Sources say if at all IT players do come on board, we could see am open offer.
However, the bankers would have to formalise a mandate if at all there could be a secondary deal happening-that is something we need to watch out for. Sources have indicated that promoters at this point in time are slightly cautious about the sector.
NIIT Tech, while it has been performing decently in the last three quarters, needs to probably see some kind of action happening as far as the next one-year is concerned.
The promoters hold around 39.18% in NIIT Tech. The company said it cannot comment on market speculation as per its policy.
