TeamLease Services Limited one of India’s largest staffing companies, and E Centric Solutions Private Limited , a leading staffing company, today announced the signing of a definitive agreement vide which TeamLease, through its wholly owned subsidiary TeamLease Digital Private Limited., acquires the IT staffing business of eCentric by way of business transfer/ slump sale arrangement.
The transaction remains subject to transfer of client contracts, customary closing conditions and regulatory approvals and is expected to close before the end of April 2019. The transaction will be immediately accretive to TeamLeases’ earnings per share and be financed with existing inancial resources.
Key Terms of the Deal
eCentric shall transfer its IT staffing vertical to TL Digital by way of slump sale on a goingconcern basis, at a consideration equivalent to 4.5 multiple of the proportionate PBT transferred to TL Digital. The consideration is payable in two tranches, on transfer of clients and transition support.
TL Digital is currently one of the largest IT staffing companies in India with over 2,000 associates deployed across 40+ clients. The entire core business team of eCentric IT staffing, moves on to the rolls of TL Digital post customary closing conditions.
About eCentric and IT staffing in India
eCentric is a Hyderabad-based HR Services company. The IT Staffing vertical, operating since 2014, has over 100 core employees, 880 associates deployed across 20+ clients, with a turnover of over Rs.45 crore p.a.
India’s IT industry is an oasis of high productivity. It employs 0.7% of India’s labour force but generates about 7% of GDP. We expect total employment of the IT Industry to more than double over the next five years but the share of organized staffing, which currently hovers around 5% of total IT employment, will go up disproportionately as both service and
product companies rethink their delivery models, shelf life of skills, and surge capacity handling. The current market size of Indian IT staffing is about Rs.22,000 crore with a headcount of 2.6 lakh IT associates.