Coforge Limited, a leading global IT solutions firm, announced on April 12 that it has signed definitive agreements to acquire a controlling interest in SLK Global Solutions Private Ltd, a business process transformation enterprise offering BPM and digital solutions for the financial services industry.
Coforge shall initially acquire 60 percent stake in SLK Global, with SLK Global’s founders completely exiting, the company said in a press release.
"Fifth Third Bank’s stake in the company will be reduced to 40 percent and shall continue at that level for the next 2 years. Coforge will acquire an additional 20 percent stake from Fifth Third Bank after the completion of 2 years," it added.
The transaction is being funded by Coforge with a combination of internal accruals and external borrowings, the official release noted.
"Post-closing, the key management personnel, excluding the founder-promoter, will stay on and contribute to its continued growth," it further stated.
As part of the transaction, Fifth Third Bank has committed to remaining a significant customer of SLK Global and has also committed a base volume over five years starting FY22.
SLK Global, the press release added, has deep domain expertise in the banking and insurance segments in North America.
SLK Global reported consolidated revenue of $62 million during FY20 and is expected to report consolidated revenue of $73 million during FY21, representing a growth of about 15 percent despite the impact of Covid-19.
"The business has registered a three year revenue CAGR of over 17 percent. It is a highly profitable business and will be EBITDA margin accretive to Coforge," the press release added.
“We are very excited to welcome SLK Global and its over 7,000 employees into the Coforge family. We are equally excited and committed to the new partnership and client relationship that we have now formed with Fifth Third Bank. Fifth Third Bank shall be a Top 5 client of the firm and as our valued JV partner we look forward to creating a deep and mutually rewarding partnership with them in the years to come," Coforge CEO Sudhir Singh said.
"We expect very strong business synergies to be generated through this transaction. This differentiated, high growth, margin accretive business further strengthens our position in the North America Financial Services Industry and our BPM business," he added.
Jude Schramm, Executive Vice President and Chief Information Officer, Fifth Third Bank, said the company is looking forward to extend "with our new partners the long-term relationship we have enjoyed with SLK Global for the past 15 years".
"We remain committed to our BPM strategy and the expanded automation capabilities afforded by an IT solutions provider of Coforge’s caliber," he added.