Veranda Learning Solutions Ltd has agreed to take over Tapasya Educational Institutions Pvt. Ltd for at least Rs 362.40 crore (about $44 million), as the Kalpathi Group company continues to strike acquisitions to expand its business.
Chennai-based Veranda said in a statement Friday it will buy Tapasya in three stages. It will purchase 50% of Tapasya in the first stage, by March 31 for Rs 120 crore ($14.5 million) and a 1% stake in April 2024 in the second stage for Rs 2.40 crore. At each stage, it may make additional payments based on Tapasya’s net current assets at the time.
Verana will buy the remaining stake in the third stage on or around expiry of four years from the first stage, which means early 2028. The amount payable will depend on Tapasya’s the in 2027 with a floor price of Rs 240.00 crore. It will also pay an additional sum based on Tapasya’s free cash flows from 2023-24 and up to the date of the third tranche.
Veranda said the acquisition will help it fortify its presence in the higher education segment in the commerce domain.
“This acquisition aligns seamlessly with our commitment to delivering high-quality education solutions. Our goal is to reach 1 million students in FY24, and this move supports that endeavor,” said Suresh Kalpathi, executive director and chairman of Veranda. Tapasya’s strong presence in Telangana and Karnataka complements Veranda’s expansion strategy, he added.
Established in 2009, Tapasya serves 29 colleges across 13 locations in Telangana and Karnataka. It offers courses mainly in commerce and business studies streams as well as professional courses such as chartered accountancy. Tapasya is projected to post revenue of Rs 65 crore and EBITDA of Rs 26 crore for FY24.
Veranda made its stock exchange debut in 2022 and has grown aggressively since then. It bought seven businesses last year for a total of Rs 400 crore, taking its total spend to Rs 1,000 crore by then.
Established in 2018, Veranda specializes in competitive exam preparation. Its training programmes span various exams, from state and central civil services to banking, insurance, railways and chartered accountancy.
