Staffing services company TeamLease Services Ltd said on Monday it will acquire the IT staffing business of Hyderabad-based human resources services firm eCentric Solutions Pvt. Ltd.
The Mumbai-listed company said in a stock market disclosure eCentric will sell its IT staffing vertical to wholly owned unit TeamLease Digital Pvt. Ltd.
TeamLease, which counts homegrown private equity firm Gaja Capital as an investor, said the deal value will be equivalent to 4.5 times the proportionate profit before tax of the target business. The amount will be paid in two tranches—85% on transfer of clients and the remaining after six months of transition support.
“IT staffing is our largest specialized vertical and eCentric's business not only adds clients but our skill footprint and on-boards a great team,” said Ashok Reddy, managing director at TeamLease.
eCentric’s IT staffing vertical, operating since 2014, has about 100 core employees and 880 associates deployed across 20 clients. It reported revenue of over Rs 45 crore for the fiscal year 2017-18.
TeamLease has struck a number of acquisitions over the past couple of years. In November, it acquired a 40% stake in Mumbai-based education technology startup Schoolguru.
In May, it agreed to acquire a 30% stake in Bengaluru-based Cassius Technologies Pvt. Ltd, which runs job site Freshersworld. Prior to that, it had bought Bengaluru-based Keystone Business Solutions Pvt. Ltd to strengthen its IT staffing vertical.
TeamLease, which has been operating since 2002, mainly offers temping services where it provides temporary workforce to its clients in bulk on a contract. This allows clients to hire without adding to their direct employee base. Temping also involves hiring senior level managers on a short-term basis.
TeamLease also offers permanent staffing services. It has hired 17 lakh people over the past 17 years. The company posted net sales of Rs 3,440 crore for 2017-18, up from Rs 2,991 crore the year before.