DE Shaw group to sell stake in Excelsoft

D E Shaw Group is understood to have put half of its 35 per cent stake in Mysore-based e-learning firm Excelsoft on the block, a move in which Shaw is expected to reap back its investment.

The global PE fund had picked up the stake in Excelsoft for Rs 135 crore in April 2008, paving way for UTI Ventures’ (now Ascent Capital) blockbuster exit by giving it 50 times return on its investment.

The deal, which is expected to value Excelsoft at close to Rs 600 crore, almost double of the 2008 levels of Rs 350 crore, will catapult the growth of e-learning companies in India. This development comes just a couple of months after Pearson Group increased its stake in Bangalore-based Tutorvista to 76 per cent for Rs 577 crore.

Excelsoft offers products and services in the e-learning domain, that serve the interests of educational publishers, universities and schools as well as the government, defence and corporate sector, including test and assessment services.

Its e-learning applications include the Virtual Learning Environment, comprising a learning management system and an assessment management system.

According to industry information, the top line of Excelsoft is understood to be close to be around Rs 125 crore and operates under a high margin business model of taking the product licencing route on which services and consulting add value and stickiness.

Its net profit is understood to be at Rs 55 crore and according to bankers, 10-12 multiples is a decent valuation for fresh funds to come into this company. Anil Chawla, managing directorn of D E Shaw Group’s private equity business offered not to comment on this deal.

“Excelsoft has created intellectual property in the area of e-learning technologies and combines its strengths in software development, instructional design and e-learning content development to deliver e-learning solutions,” said a PE industry player.

Clients include Pearson, Wolter Kluwer, Thomson Learning, Guardian, Harvard Press, Oxford University and Infosys Technologies among others.

Excelsoft was founded in 2000 by Dhananjaya and D Sudhanva in Mysore. It managed to break into foreign corporations, universities and schools, publishers, e-learning portals and governments.