Core Projects, a Mumbai-based IT company involved in education projects, is about to acquire Aarman, an ERP software company and SkyBridge. Both companies are US-based. The deal size for Aarman is estimated to be around $8 mn; it has revenues of around $10 mn. SkyBridge may be bought for $8-10 mn. Announcements are expected in the first week of January. A third acquisition in the UK is said to be at a preliminary stage.
Core has raised funds for these acquisitions through a recent FCCB issue. The company had issued 1, 225 FCCBs of $10, 000 each in November 2006. The issue had collected Rs. 56 crores and the bonds have been listed on the Singapore Stock Exchange.
The company now has a kitty of Rs. 100 crores which includes FCCB proceeds and internal resources. Financial majors including Morgan Stanley, Deutsche Bank and Goldman Sachs have converted the bonds into equity and have picked up a 10% stake for $8.75 mn. The stake has been acquired following the conversion of the FCCBs by financial majors at Rs. 315 per share for Rs. 10 each, against the FCCB price of Rs. 310. The Core scrip closed at Rs. 469 on Thursday on BSE.
Morgan Stanley has the largest share at 4.03%, Grants (a Goldman Sachs subsidiary through which they will hold the stake) has 3.46% and Deutsche Bank has 2.59%. FCCBs worth $3.5 million still remain for conversion.
Core is present in verticals like education, pharmaceuticals and bio-science. The company, however, has a strong focus on education. It essentially maintains management information system for government-aided schools. Based on the data collected it devises solutions and analyses drop-out rates among students. Recently, it had bagged a Rs 25-crore project from the Jharkhand government to maintain education records of state government schools.
Read The Economic Times article.
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