Majesco Shares Surge After $594-Million Deal To Sell U.S. Arm To Thoma Bravo

Majesco signed a pact to promote its U.S. subsidiary to non-public fairness agency Thoma Bravo, ramping up payouts to shareholders.

The Nasdaq-listed arm of the data expertise firm might be offered at $13.1 apiece, a premium of 71% to its closing value on July 17, in accordance with the company announcement on exchanges. The deal values the corporate at $594 million.

Apart from shareholders’ approval, the transaction would require Securities and Alternate Fee and HSR/antitrust approval within the U.S., and the Reserve Financial institution of India and 281-Revenue Tax no objection certificates in India. The deal is anticipated to shut by the top of 2021.

Majesco India holds 74% in its U.S. arm, and can get $421 million, or about Rs 3,150 crore, from this deal. The corporate has a present market capitalisation of Rs 1,100 crore.

Submit taxes, the money accrual for Majesco might be Rs 2,550 crore, representing a good worth of Rs 850 apiece. That’s greater than 120% premium to Majesco’s closing at Rs 382 apiece on July 20 on Indian bourses, in accordance with broking agency Phillip Capital, which has the inventory below evaluation.

Majesco’s promoters, who maintain over 38% fairness within the firm, mentioned they’d distribute your entire proceeds to shareholders within the type of buybacks and/or dividends.

Phillip Capital sees the transaction as a “fruitful fruits of the efforts put in by the Majesco administration and endurance with which the traders have supported the administration through the years”. After this announcement, the financials and valuations of the corporate don’t maintain any significance, it mentioned.

Shares of Majesco India hit the higher circuit at 5% for the sixth straight session. That compares with a 1.24% achieve within the Nifty 50 Index.