Sterlite Tech gains after acquiring global telecom software company Elitecore Technologies

Sterlite Technologies rose 1.67% to Rs 81.95 at 11:40 IST on BSE after the company said that it has entered into a definitive agreement for the acquisition of Elitecore Technologies, a global telecom software product company.

The company made announcement before market hours today, 23 September 2015,

Meanwhile, the S&P BSE Sensex was down 40.45 points or 0.16% at 25,611.39.

On BSE, so far 1.03 lakh shares were traded in the counter as against average daily volume of 7.52 lakh shares in the past one quarter.

The stock hit a high of Rs 82.70 and a low of Rs 80.20 so far during the day. The stock had hit a 52-week high of Rs 109.90 on 4 August 2015. The stock had hit a 52-week low of Rs 48.45 on 27 March 2015.

The stock had outperformed the market over the past one month till 22 September 2015, falling 2.01% compared with Sensex's 6.26% fall. The stock had also outperformed the market in past one quarter, gaining 17.92% as against Sensex's 7.49% fall.

The mid-cap firm has equity capital of Rs 78.92 crore. Face value per share is Rs 2.

Sterlite Technologies said Elitecore Technologies (Elitecoreis) is a leading provider of Operations Support Services /Business Support Services and is majority owned by First Carlyle Ventures Mauritius, whose affiliate is advised by The Carlyle Group. Elitecore was established in 1999 by highly experienced software technocrats with over 20 years of experience. Elitecore is a profitable niche player with FY 2015 revenues of Rs 147 crore and EBITDA (earnings before interest, taxes, depreciation and amortization) of Rs 16 crore and is cash positive on a net debt basis. The company has been continuously profitable for the last 7 years and the financial performance would continue to improve given the strategic decision to build its service capabilities and focus on investing in right growth product categories.

This acquisition will be for an overall enterprise value of approximately Rs 180 crore in an all-cash deal. The transaction is expected to be value accretive for the financial year ending 31 March 2018 (FY 2017) and is expected to be closed shortly subject to completion of certain regulatory and statutory formalities. Upon completion of the transaction, Elitecore Technologies is proposed to be merged into Sterlite Technologies.

This acquisition widens Sterlite's telecom portfolio of offerings to its global customers-in addition to its current offerings comprising optical products and allied system integration services, Sterlite will now offer industry leading software solutions for operations support, business support and revenue management.

Sterlite Technologies reported consolidated net loss of Rs 11.34 crore in Q1 June 2015 compared with net loss of Rs 11.88 crore in Q1 June 2014. Total income rose 69.9% to Rs 990.94 crore in Q1 June 2015 over Q1 June 2014.

Sterlite Technologies (STL) develops & delivers products, solutions and infrastructure for telecom & power transmission networks, globally.

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