Scandent Group has decided to merge US-based BPO Company Cambridge Services holding into its listed entity Scandent Solutions Corporation. The share exchange ratio has been set at one share of Cambridge for 583 shares of Scandent Solutions, Scandent Group had stemmed out the insurance processing division of US Insurance major Aon last year and bought a 75% stake in it. The total acquisition value at that time was said to - be around $110m. Aons 25% stake in Cambridge Services will translate into a16.2% equity stake in Scandent Solutions. Scandent Groups holding in the listed entity will also go up to 62% from 42% currently in Scandent Solutions.
It is difficult to arrive at the valuation of Cambridge Services, as its net profit is not known. It is also not known whether it was a profitable company when it was acquired. Scandent group officials say that there were a lot of corporate overheads, which were added to the division, but refused to give any net profit numbers. Independent valuers KPMG and Haribhakti have determined the share exchange ratio for the merger. Scandent Solutions has a share capital of 28,908,755 equity shares whereas the share capital of Cambridge comprises of 1,28,229 units. At todays price of Rs 330, Scandents market capitalization is around Rs 950 crore. On the basis of this price, which has been rising continuously from Rs 230 in the last 20 days, the value of the swap is around Rs 2.466 crore ($ 563m).
As based on the recommendations of the independent valuers, every member of Cambridge holding one unit in Cambridge will be issued 583 fully paid-up equity shares of Rs 10 each of Scandent Solutions. The total number of fresh equity shares to be issued by Scandent Solutions to the shareholders of Cambridge will be 74.757,507 equity shares of Rs 10 each, fully paid-up. Scandent Group vice- chairman, Satyen Patel, said: "The board of Scandent Solutions has also approved a proposal to raise funds through a GDR/ADR issue up to the tune of $ 75m."Aon is also among the largest customers of Cambridge Solutions and contributes 6% of its total revenues.
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| Posted : 9/6/2005 |
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