Coforge to scale up BPM operations with strategic investment in SLK Global Solutions

Coforge is acquiring a strategic stake in SLK Global Solutions (Investee Company). The acquisition will enable Coforge acquire a new Top-5 client, substantially scale up its current BPM operations business, strengthen its presence in the Financial Services vertical, and noticeably expand its footprint in the US geography.

Additionally, Coforge sees significant synergies across its $ 100Mn Automation practice and the Investee Company BPM business, enabling the combined entities to drive differentiated impact in the market. This acquisition will also add an Indian Tier-3 city location capability to Coforge and enable it to compete for large deals with a material BPO/BPM operations component.

The transaction also provides for a minimum revenue commitment from Fifth Third Bank for 5 years (FY21-FY26).

Founded in 2001, Investee Company derives its revenues from North America with delivery centres and offices in India (Pune, Kolhapur, Bangalore), the US, and the Philippines. It is also a quasi-captive for Fifth Third Bank, which has its headquarters in the state of Ohio in the US. Fifth Third is the largest customer as well as a significant minority shareholder in the Investee Company and while the Indian promoters will completely exit the business at first closing, it will continue to be a JV partner in the acquired entity.

Investee Company's consolidated revenues as per Indian GAAP for the past three financial years FY20 18, FY20 19, and FY2020 were Rs 290 crore, Rs 350 crore, and Rs 434 crore. It is expected to repo rt a revenue growth of over 15% during FY202 I. The business is highly profitable and is expected to be EBITDA margin accretive to Coforge.

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