Hinduja Global Solutions Ltd (HGSL), the business process management arm of the multibillion-dollar Hinduja Group conglomerate, has said that it will up its stake in a United States-based step-down subsidiary to nearly 92%.
In a stock exchange filing, the Bengaluru-based HGSL has said that it will purchase an additional 6.11% equity stake in HGS Digital LLC, formerly known as Element Solutions LLC.
The acquisition, which will be made for a consideration of $1.35 million (approximately Rs 10.11 crore at current exchange rates), will be made via Hinduja Global Solutions UK Ltd (HGS UK), another subsidiary of HGSL.
HGS UK already holds 85.66% in HGS Digital; with this fresh stake pick-up its total shareholding will go up to 91.77%.
HGS Digital, set up in its original avatar in 2003, is a digital services provider that helps its customers to develop integrated digital business through consulting and the implementation of Oracle DX Solutions and Salesforce platforms. It is also involved in cloud migration and support maintenance.
In March 2018, the publicly listed Hinduja Global announced that it would acquire a 57% stake in the company via HGS UK for a consideration of $5 million. At the time, company chief executive officer Partha De Sarkar said the acquisition would help drive its strategy of helping clients achieve their digital transformations.
“The investment in Element Solutions expands on this strategy and helps position us as an end-to-end digital transformational leader that can impact the entire customer lifecycle for brands,” he said at the time.
Following this, the company in November last year acquired a further 14.33% stake for $1.61 million in HGS Digital LLC. It then acquired another 14.33% in August this year for a consideration of $3.17 million.
The US unit’s revenues have jumped in line with its implied valuation, reporting $15.5 million in the 2019 financial year and $18.4 million for the next fiscal.
Shares of Hinduja Global Solutions Ltd ended trading on Friday 1.54% up at Rs 773.65 apiece. The company reported consolidated net sales of Rs 4,986.5 crore for the 2020 fiscal, with post-tax profits of Rs 205.16 crore for the same period.
HGS Digital LLC is not the only US-based business it has acquired in 2018. Also in March, the company agreed to acquire population health management company AxisPoint Health for $14 million in an all-cash deal. In December that year, it sold several of the new subsidiary’s US nurse advice line service contracts to Infomedia Group Inc. for $5.3 million (around Rs 37 crore).