Will spend Rs 75 crore over two years
Teamlease Services, India’s largest temporary staffing company, is acquiring Indian Institute of Job Training (IIJT), a large vocational training provider based in Gurgaon. Teamlease has effected this deal by buying out the majority stake held by US-based private equity fund Tiger Capital. The promoters led by Devesh Srivasthava, chairman of IIJT, will continue to run the firm. While the cost of acquisition has not been disclosed Teamlease has effected this move through a combination of internal accruals and a private equity infusion from Gaja Capital, an India focussed private equity fund. Gaja made a capital infusion of $12 million (approximately Rs 54 crore) into the deal.
Over the years, the three year old IIJT has seen investments of over Rs 30 crore.
Teamlease will run IIJT as a separate subsidiary. IIJT has a major presence in North and East India with a network of over 250 centres and a capacity to train 100,000 students at any given time which includes sales, retail, finance, accounting and ICT. In all, Teamlease will be spending Rs 75 crore over the next two years on IIJT, basically to bring IIJT into South and other parts of the country and to expand IIJT’s portfolio.
The deal was completed by a combination of buying out the existing shareholders (the founders and Tiger Capital Management) and induction of new capital into the company. Teamlease has an option to take full ownership of the company at a future date. Post the IIJT acquisition, Teamlease will expand its offerings to its clientele of over 1,200 companies. The three products it will offer the companies include hiring (permanent and temporary), hygiene (payroll, benefits and compliance administration) and productivity (assessments and training).
Manish Sabharwal, Chairman, Teamlease Services told Business Standard, “We are able to hire only 2-3 per cent of those walk in. Candidates want jobs, but don’t want to get trained, while companies want trained candidates. This acquisition will help us bridge that gap and help sort out the unemployability issue we encounter.”
“IIJT also plugs a gap in our products demanded by job seekers, employees and clients and help us expand our national employment footprint,” added Sabharwal.
In a media statement, Devesh Srivasthava, chairman of IIJT, said, “We have been growing fast for the past few years. But taking things to the next level required a partner that brought an employment ecosystem because vocational training consumers — students and parents — are increasingly demanding employment outcomes. As India’s largest staffing company, Teamlease was a logical partner.”
“The promoters will remain strategic stakeholders, holding a minority stake,” said Ashok Reddy, managing director, Teamlease Services. Ashish Prasad, CEO of IIJT, will also stay on.
