The Board of Directors of the CL Educate Limited ("Company") at its meeting held today ie., on Thursday, August 29, 2024, has granted approval to the acquisition of Digital Examination Business (DEX) of NSEIT Limited ("NSEIT") for an initial consideration of Rs. 230 Crores, payable in cash ("Proposed Acquisition"), and making a binding offer towards the same to the counterparty. An additional consideration not exceeding Rs 75 Crores is payable subject to achievement of certain business milestones. The Proposed Acquisition excludes, and will be undertaken post completion of sale of, the technology business of NSEIT Limited. NSEIT limited is a wholly owned subsidiary of NSE Investments Limited, and a step-down subsidiary of National Stock Exchange of India Ltd. ("NSE").
The execution and ultimate consummation of the Proposed Acquisition remains subject to such approvals, accounting and legal clearances and representations as may be required, and the execution of binding agreements between the parties.
Digital Examination ("DEX") of NSEIT which is an unlisted Public Company is, engaged in the business of providing consultancy services in relation to and acting as a technical collaborator in matters pertaining to automation of end-to-end online examinations, testing, online surveys, question bank development, management of online applications and registrations, developing test modules, candidate registration and recruitment services, digital verification processes, in-course/online assessment, digital learning etc.
The Proposed Acquisition is a related diversification in an adjacency of our existing EdTech business. This is a robust and established opportunity of buying a business that has produced revenues of nearly Rs.200 Crores last year and has an order book to exceed that in the Financial Year 2024-25 with an EBITDA Margin in excess of 17%. The business is currently zero debt, cash accretive, with a significant growth opportunity across multiple markets.
The initial consideration to be paid is Rs. 230 Crores, payable in cash and an additional consideration of up to Rs 75 Crores is payable subject to achievement of agreed FY 2025 performance goals. The Proposed Acquisition is proposed to be funded through a mix of debt and internal accruals. |
