Zensar Technologies rose 3.24% to Rs 191.40 after the company said it has divested its non-core third-party maintenance (TPM) business to Service Express for a consideration of $10 million.
Zensar Technologies has entered into an agreement with Service Express LLC to divest its global TPM business. Under the terms of the transaction, Zensar's TPM business will be transferred to Service Express, a leading TPM service provider headquartered in the US, by way of a 100% share sale of Zensar's equity shareholding in PSI Holding Group Inc., a wholly owned subsidiary of Zensar Technologies Inc.Zensar said it received sale consideration comprising of $10 million in cash on the closing date, subject to closing conditions and an additional deferred earnout of $5 million, based on performance, set out in the stock purchase agreement. The expected date of completion of sale is 18 December 2020 or upon fulfilment of closing conditions, whichever is earlier, or such other date, as mutually agreed, it added. The closing of the transaction is subject to approval by shareholders of Zensar Technologies.
The deal is in line with Zensar's commitment to focus on and invest in its core businesses which comprised 96% of its revenues as on Q1FY21.
The TPM business provides third party hardware maintenance support for a wide variety of data center equipment and platforms. These services include remote support, call handling, spare parts, logistics management, replacement & installation, repairs and field support. As part of its long-term strategy, Zensar had identified two non-core businesses, comprising Rest of the World (RoW) business and the TPM business. Zensar had divested the RoW business last year and is now divesting the TPM business.
Zensar is a leading digital solutions and technology services company that specializes in partnering with global organizations across industries on their digital transformation journey. Its consolidated net profit rose 5.5% to Rs 73.30 crore on 2.60% decrease in net sales to Rs 991.24 crore in Q1 June 2020 over Q4 March 2020.
The scrip has spurted 200.47% from its 52-week low of Rs 63.70 hit on 24 March 2020.
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