Aptech, as part of its restructuring plan, has decided to hive off its training unit into a separate entity, and merge Hexaware Technologies, the unlisted software company controlled by its chairman Atul Nishar, with its software business.
The company board, which met today in the city, approved the restructuring proposal under which the existing Aptech shareholders will get six shares in the training subsidiary for every 10 held. The board also decided that Hexaware shareholders will get one Aptech share (Rs 10 face value) for every three shares (Rs 5 face value) held.
Aptech shares jumped 12.03 per cent to close at Rs 115.45 on the Bombay Stock Exchange today, while traded volume touched 14 lakh shares.
According to Aptech officials, the demerger of the training business will reduce its paid-up capital by 60 per cent. The training company will also apply for listing on stock exchanges.
"We hope to leverage the benefit of scale of operations for software business and create a sharper focus, and flexibility for acquisitions for both the businesses," said Aptech chairman Atul Nishar.
The restructuring plan had originally been mooted in February, with a proposal to merge Aptech's software business with unlisted Hexaware Technologies. But the decision was deferred following opposition from investors and some company personnel who objected to transferring the assets of Aptech's software business to an unlisted firm.
Post-merger, the promoters' shareholding in the entity will be 38 per cent. ===Currently, the promoters hold 26 per cent in Aptech.
Nishar said the committee of directors had recommended the creation of a new training and education business which is to be listed on the bourses, and to retain the software business in the parent company for maximising tax benefits. They also suggested to retain the Aptech brand with the training and education business.
They also suggested to merge Hexaware Technologies -- a SEI CMM level 5 Company, into Aptech's software business to create a dominant software company with significant scale of operations. The merger presents a good fit due to the focus on different technology areas of both the companies, a similar geographical focus, resultant broader vertical focus and similar organisational culture and management.
Nishar said, "We expect the combined entity to be among the top 10 software exporters in India. The aim is to grow higher than industry average."
Analysts maintain that Hexaware has a much wider base of Fortune 1000 companies as clients compared to Aptech. However, analysts and investment bankers say that they needed to study the merger ratios closely to decide on how good the deal really was for shareholders.
