Is NEC-Polaris deal inching closer to finish line?

Deal Street seems to be buzzing in the tech space. After Barrings PE beat NEC to buying a majority stake in Hexaware, sources told CNBC-TV18 that NEC is in talks with Polaris to buyout its services business. Domestic tech majors like Tech Mahindra were reportedly eyeing the deal but had backed out due to high valuation. "The promoters of Polaris were asking for a valuation of USD 330 million for the services business alone, which was much higher than the valuation of the entire company;" said a source close to the development, on condition of anonymity.

After almost one month of negotiation, sources say the promoters of Polaris have agreed to bring down their valuation expectations to USD 200 million (Rs 1250 crore). At today's closing price, the entire company was valued at Rs 1283 crore. Even at USD 200 million, the deal is at a premium for the services business which contributes to 80 percent of the complete business.
The exact demarcation of shares, once the demerger of Polaris Financial Technologies goes through, is unclear but the deal with NEC will be done only once the demerger is completed.