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Ascent Capital, New Vernon To Exit In Semantic Space IPO

29 November, 2010

Private equity firms Ascent Capital (formerly UTI Ventures) and New Vernon are exiting their four-year-old investment in IT services firm Semantic Space Technologies Limited that is all set to go public. Although the company is yet to give exact quantum of money it plans to raise in the draft prospectus filed with market regulator, it hints at an issue size of around Rs 130-140 crore, just over half of which will go to the company as part of fresh shares sale.

The PE investors who together hold around 17.7% together are selling out completely in the public issue. The average cost of acquisition for New Vernon is pegged at Rs 100.73 per share compared to around Rs 132 per share for the other PE player.  While New Vernon will pocket net returns of around 2x, Ascent Capital is expected to generate net returns of close to 1.3x.

Both the firms had put in Rs 8.7 crore each in March 2006. In early 2007, the then UTI Ventures also bought more shares at twice the price from the promoters for around Rs 8 crore bringing its total exposure to around Rs 16.7 crore.

Founded in 1997, IT services firm Semantic Space offers a variety of solutions and services in mainly three areas: Application Services, Independent Verification and Validation Services (IVV) and Systems Integration (SI) Solutions in the Application Infrastructure and Middleware space.

It intends to use the funds raised through issue of fresh shares for repayment of term loan (Rs 17.8 crore), investments in proprietary toolsets (Rs 8.9 crore), establishment of offshore delivery centre (Rs 6.49 crore), acquisitions and other strategic initiatives (Rs 30 crore). In particular it expects acquisitions and other strategic moves in the fiscal ending March’12.

For the year ended March’10 the company had total revenues of Rs 361 crore with net profit of Rs 27 crore. For the quarter ended June 30, the firm had total revenues of Rs 116.7 crore with net profit of Rs 6.8 crore.


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Ascent Capital, New Vernon To Exit In Semantic Space IPO

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