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Business News/ Money / SRIT’s healthcare business may go to Religare firm
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SRIT’s healthcare business may go to Religare firm

SRIT’s healthcare business may go to Religare firm

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Real estate firm Sobha Developers Ltd’s chairman P.N.C. Menon is exiting decade-old investments in information technology (IT) services parked in a stand-alone entity, Sobha Renaissance Information Technology (SRIT).

Bangalore-based SRIT, with annual revenue of Rs140 crore, is being carved out for strategic sales, with Religare Technova Ltd close to snapping up the healthcare solutions business.

With the move, Menon will be exiting non-core investments after his mainstay real estate development business weathered a difficult phase in the economic slump.

Religare Technova, the holding company for the IT business of diversified Religare Group, will pay Rs20-25 crore for acquiring the healthcare services part of SRIT, said bankers with direct knowledge of the development who didn’t want to be named.

The initial healthcare deal could be unveiled as early as this week. The healthcare business accounts for 15% of SRIT revenue.

Telecom, healthcare and enterprise are among the large domains of SRIT’s services play with nearly 500 employees on the rolls.

Discussions are on with other suitors for the sale of telecom and enterprise businesses either in a single transaction or by way of two separate deals. A reverse merger with a smaller services firm is one of the options being considered, with the current management at SRIT leading the combined entity.

Investment bankers said Religare Technova has been on the lookout for IT services and business process outsourcing, or BPO, acquisitions.

SRIT has been working with a few investment banks, including US-based Mooreland Partners, for a possible structured sale of the company.

When contacted, a Religare spokesperson declined to comment. An email sent to SRIT co-founder and CEO Madhu Nambiar had elicited no response at the time of filing this story.

SRIT had accumulated debt of around Rs140 crore because of small buyouts supported by personal guarantees from Menon at the height of the liquidity boom in 2006-07.

The most high-profile of its four acquisitions was the buyout of Objective Systems Integrators Inc., a global supplier of telecom operations support systems, from Agilent Technologies Inc.

Sobha Developers holds around a 20% stake in the entity with Menon owning a stake in his personal capacity along with a few other investors. SRIT management headed by founder-CEO Nambiar also holds a minority stake in the firm, which figured among Deloitte’s 50 fastest growing Asian enterprises in 2007.

Nambiar joined hands with Sobha’s Menon to set up an IT services business focused on telecom and healthcare nearly a decade back.

People familiar with the situation said Menon wanted to be relieved of the personal guarantees executed for the IT business, which was peripheral to the real estate operations.

Menon’s flagship Sobha Developers went through turmoil in the last 18 months as the real estate market slumped in the aftermath of the global financial crisis. The worst of that slump is over, with buyer demand reviving and sale of residential units beginning to pick up once again.

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Published: 18 Jan 2010, 11:01 PM IST
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