Published On: Wed, Feb 1st, 2012

Core Education to buy Aptech from Rakesh Jhunjhunwala

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Aptech

Aptech

Core Education & Technologies, an educational services firm, has emerged as the front-runner to acquire billionaire investor Rakesh Jhunjhunwala’s stake in Aptech, according to news report in Economic Times.  Aptech, which is one of the larger listed players in vocational education space, was put up for sale by its promoter Jhunjhunwala.

Jhunjhunwala is seeking a valuation of about Rs 700 crore for his stake, a 63% premium to Aptech’s current price on the BSE. Jhunjhunwala purchased 36% stake in the company six years ago at one third the current price.

Core Education is India’s largest educational services firm by market capitalisation – Rs 2,888 crore  – and has revenues of Rs 1,000 crore.

How ever Core was not among the initial possible buyers, which included TeamLease, a leading staffing and training company  interest in vocational education , and Manipal Universal Learning, one of India’s largest private education organizations.

The sale, expected to be completed by March, is being handled by investment bank Avendus Capital. Audit and advisory firm Ernst & Young is doing due diligence of Aptech on behalf of Avendus Capital and the same will be shared with the bidders later this week, a source added. A senior official at E&Y confirmed that his firm has been assigned the due diligence work.

The valuation of Aptech appears to be delaying the conclusion of the sale according to sources. The Rs 223-crore Aptech, was started as an IT training institute in Mumbai in 1986 by Atul Nishar. After symbolising computer training in India for a long time along with rival NIIT, it has now evolved into a broad-based education services firm with courses in animation, IT hardware, English learning and aviation and is present in 40 countries. Last fiscal year, it had an operating margin of 20.64% and reported net profit of Rs 42 crore in FY11.  In 2o10, it also bought Maya Academy of Advanced Cinematics, promoted by Bollywood director Ketan Mehta and Deepa Sahi for Rs 76 Crore.