Staffing firm TeamLease Services Ltd has agreed to buy Bengaluru-based NichePro Technologies Pvt. Ltd for Rs 29.5 crore ($4.4 million) in its second deal within three months to strengthen its information technology staffing vertical.
TeamLease will make the acquisition through its wholly owned subsidiary TeamLease Staffing Services Pvt. Ltd, the company said in a statement. The all-cash deal will be funded with existing cash reserves and is expected to close before the end of October, the company said.
Ashok Kumar Nedurumalli, managing director and co-founder, said the acquisition complements TeamLease’s recent acquisition of ASAP Info Systems Pvt. Ltd. The use of staffing services by IT companies is increasing rapidly as they accelerate their productivity focus and look to control costs, he added.
TeamLease agreed to acquire ASAP Info Systems in July for Rs 67 crore ($10 million) to provide recruitment services to IT companies.
TeamLease, which listed on the bourses in February after an initial public offering (IPO) that was heavily oversubscribed, had said in its share sale document that it planned to use part of the proceeds from the IPO for acquisitions.
During the IPO, the company raised more than Rs 400 crore and said that it planned to use around Rs 80 crore for existing and incremental working capital requirements, Rs 25 crore for acquisitions and other strategic initiatives, and Rs 15 crore to upgrade its IT infrastructure.
Nichepro Technologies recorded revenue of about Rs 26 crore from staffing services with earnings before interest, tax, amortization and depreciation of approximately Rs 6.8 crore in FY2016. It offers IT staffing solutions to various IT product companies with over 150 associates and 30 core employees.
Operating since 2002, TeamLease has eight offices and 1,400 clients across the country. It provides human resources services, offering staffing, payroll processing, recruitment, compliance and training services.
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