Coforge announced that it has signed definitive agreements to acquire a controlling interest in SLK Global Solutions (SLK Global), a business process transformation enterprise offering BPM and digital solutions for the financial services industry.
A fast-growing business with a robust operating profile, SLK Global has deep domain expertise in the banking and insurance segments in North America. It enjoys multiple long-standing and scalable relationships with marquee clients with strong growth potential, including with Fifth Third Bank, N. A., which in addition to being the largest customer, is also a significant minority shareholder. It has also created a suite of platform solutions that provide a differentiation to its clients.
Coforge shall initially acquire 60% stake in SLK Global, with SLK Global's founders completely exiting.
Fifth Third Bank's stake in the company will be reduced to 40% and shall continue at that level for the next 2 years. Coforge will acquire an additional 20% stake from Fifth Third Bank after the completion of 2 years.
As part of the transaction, Fifth Third Bank has committed to remaining a significant customer of SLK Global and has also committed a base volume over 5 years starting FY'22.
SLK Global reported consolidated revenue of $62 million during FY'20 and is expected to report consolidated revenue of $73 million during FY'21, representing a growth of about 15% despite the impact of Covid-19. The business has registered a three year revenue CAGR of over 17%. It is a highly profitable business and will be EBITDA margin accretive to Coforge.
The transaction is being funded by Coforge with a combination of internal accruals and external borrowings.
Post-closing, the key management personnel, excluding the founder-promoter, will stay on and contribute to its continued growth.
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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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