Zensar Technologies Ltd, a publicly listed digital solutions and technology services company, has agreed to sell its third-party maintenance (TPM) business unit to Service Express, a Michigan, United States-based TPM provider.
Pune-based Zensar will divest its entire shareholding in PSI Holding Group Inc., which is held by its wholly owned subsidiary Zensar Technologies Inc. The sale is in line with its long-term strategy of identifying non-core units, the company said in a statement.
As part of this overall process, the technology provider identified two such non-core businesses – its rest of the world (RoW) and TPM arms. In January last year, it sold off units comprising its RoW businesses to a unit of the US-based IT services company First Tek Inc.
The transaction will take place for an all-cash consideration of $10 million (Rs 73.4 crore). Separately, there is an additional deferred earnout component of $5 million (Rs 36.7 crore) linked to performance objectives set out in the share purchase agreement.
Per a stock-exchange filing by Zensar, PSI Holding Group represents approximately 8% of its consolidated financials, along with 5% of its net worth.
The unit being acquired by Service Express provides third-party hardware maintenance support for a variety of data centre equipment and platforms. Services provided include remote support, call handling, spare parts, logistics management, and replacement and installation.
“Our complete focus and attention are to grow our core businesses consisting of digital, cloud and IT services,” Zensar chief executive officer and managing director Sandeep Kishore said.
Service Express CEO Ron Alvesteffer added that the acquisition was in line with its core offerings and that it will help accelerate its growth in the larger TPM segment.
The company – which was spun out of Great Lakes Computer (GLC) in 1993 – was acquired through a leveraged buyout in partnership with US-based private equity firm Harvest Partners in November last year. According to its website, Harvest provided equity capital, and arranged debt financing and equity co-investment capital.
Shares of Zensar Technologies were trading 1.05% up at Rs 187.35 apiece at the time of writing this report. The company posted consolidated net sales of Rs 4,181.68 crore for the 2019-20 financial year, with a profit-after-tax figure of Rs 271.6 crore for the same period.