NIIT buys UK risk solution firm

Telecom & infotech firms hit the acquisition trail

NIIT Technologies today acquired 51 per cent stake in the UK-based insurance solutions provider ROOM Solutions for $25 million.

The all-cash deal, which is the company's first after its separation from NIIT Limited in 2004, would result in the company scaling up its offshore capacity in India over the next two years.

"ROOM Solutions strengthens NIIT Technologies' insurance capability by bringing in deep domain expertise in the commercial insurance space," said Chairman NIIT technologies, Rajendra Pawar.

The company, which has identified retail, transportation and insurance as the key verticals it plans to focus on, is also planning inorganic growth in the other two sectors.

"We plan inorganic growth in retail and transportation segments also," said Arvind Thakur, CEO.

The company would scout for acquisitions in the geographies it currently has a presence which includes North America, Europe, Asia and Australia.

NIIT Technologies, which would fund the deal through both debt and accruals, plans to acquire the remaining equity in ROOM Solutions over the next 18 months, added Pawar.

ROOM Solutions' 120 professionals would continue to work in NIIT Technologies' wholly-owned subsidiary.

"We plan to increase the off shore strength in India but the domain experts will continue to be at ROOM Solutions," added Pawar. NIIT Technologies currently has a work force of 3,300 employees.

ROOM Solutions, which reported a net profit of four per cent and earnings before interest, tax and dividend of 8 per cent, has Thomas Miller, Ace and Hardy as some of its clients. The board of ROOM Solutions would also be restructured.

"The five -member board would have three members of NIIT Technologies and two founder members of ROOM," added Thakur.