Exit to profit from Accelya deal

After touching its 10-year high of Rs168.7, the stock of Kale Consultants settled at Rs152.85, up 7.11 per cent since its deal with French BPO firm Accelya last month.

According to the deal, Accelya will buy the promoters’ 35.6 per cent stake in Kale Consultants and make an open offer for an additional 20 per cent. Priced at Rs172 per share, the deal is not too expensive (valuing the company at Rs273 crore) for the French company as it allows Accelya to gain entry into the Indian market.

Perfect synergy
Both Kale Consultants and Accelya cater to the airlines and travel industry. While Kale offers a gamut of IPR-led products and services, Accelya specialises in invoices, travel reservations, airline tickets, payment instructions, credit card collections, etc, for the aviation sector. 

Kale Consultants had delivered lower-than-expected results for the quarter ended June 2010 due to a slowdown in the airline industry. This deal will bring capital to support expansion in the logistics space. Kale can also leverage the processing and hosting capabilities of Accelya in the airline and travel industry.

SLOW TAKE-OFF
Kale Consultants (Rs Crore)	FY '09	FY '10	FY '11
Revenues	146.13	166.95	200.34
Ebitda Margin (%)	23.20	24.05	23.04
Profit after tax	17.29	26.30	31.35
EPS	12.40	18.09	21.34

Tender shares, say analysts
If fully subscribed, the offfer will raise Accelya's stake in Kale to 55.6 per cent. Analysts believe shareholders should tender in the open offer as valuations offered are on the higher end and can be a good exit point. There is also uncertainty about the future plans of Accelya regarding the realignment and size of each business of Kale Consultants as also the latter’s growth prospects.