Aftek to get Rs 800 cr from Seekport sale

Aftek, a Mumbai-based business management products provider, plans to divest 24.75 per cent stake in search engine Seekport.

The company holds the stake through its Munich-based wholly-owned subsidiary - Arexera Information Technologies (Arexera).

The reason for selling the stake in Seekport is to take advantage of high valuations that search engines such as Google, Baidu (China), and Yandex command.

Seekport, a Swiss entity, listed on the Frankfurt Stock Exchange this September. Arexera acquired the 24.75 per cent stake for leveraging the company's search-related technology and patent intellectual property (IP).

The disinvestment, expected to be carried out in phases, is eventually expected to fetch Aftek around $200 million (roughly Rs 800 crore), according to an investment banking source.

It will be significant for Aftek since its revenue as on September 30, 2007 stood at around Rs 96 crore and its market capitalisation at today's closing price (Rs 83) stands at Rs 727 crore.

An Aftek spokesperson declined to comment. A company source, however, confirmed that the "disinvestment will be undertaken in phases".

"It's a way of compensating shareholders by divesting a 10 per cent stake initially. The process is on to find an anchor investor," the source added.

Meanwhile, DigiHome Solutions - the home automation service arm of Aftek - is also in talks with Intel Capital for fund infusion. Aftek has a 25 per cent stake in DigiHome which it plans to jack up to 51 per cent.

DigiHome is expected to provide digital solutions to almost 4,000 flats in financial year 2009, based on its current order book of around Rs 40-50 crore, according to the source.

It currently provides solutions to around 240 homes in Pune and Bangalore.

Analysts from Networth Stock Broking are bullish on the Aftek stock "since it has more than 100 active intellectual properties to its credit".

Arexara, for instance, has entered into an agreement with BDT of Germany, under which Arexara will license its search technology, Gingcom, for BDT's new data storage device.

Gingcom is an IT solution that enables organisations to find, restore and use every document created or received via e-mail.

For each application sold by BDT, Arexara will be entitled for a royalty of ¤250.

MONEY MATTERS

Aftek wants to cash in on the Seekport stake as search engines such as Google, Yahoo! enjoy high valuations

The company holds 24.75 per cent stake in Seekport, a web search engine, through a subsidiary in Germany

The disinvestment will be carried out in phases

Arexara, the subsidiary, has also entered into an agreement with BDT of Germany