CL Educate on a buying spree

CL Educate, a new entrant in the secondary market, informed bourses on Thursday that its board of directors have approved acquisition of the balance 49 per cent equity stake in Accendere Knowledge Management Services Pvt. Ltd., (AKMS). 

AKMS provides support services to educational institutions, universities and corporates. Consideration to acquire 49 per cent of AKMS' stake is fixed at Rs 13.23 crore, which will be settled in cash. Turnover of AKMS in FY16 stood at Rs 1.3 crore, which rose 35.4 per cent compared to FY15.

It also acquired Eten, the test preparation business division of Pearson’s IndiaCan Education for Rs 6 crore, in addition to revenue sharing. Eten is involved in coaching for CA and Civil Services preparatory courses delivered through VSAT. The deal consideration involves payment of Rs 6 crore, payable in four equal installments over 30 months and 4 per cent revenue share for next three years.

With this acquisition, the CL network expands to 192 centres with five high-tech broadcast studios reaching around 93,000 students from an earlier network of 162 centres and 83,000 students.

Further, company claimed that the acquisition would enable the company to launch CA products and also to add a general studies product offering for Civil Services entrance examination.

The coaching market has grown at 14 per cent CAGR from 2009, and was estimated at Rs 37800 crore in FY16. Moreover, as per CRISIL, the industry is expected to grow at an average rate of 13-14 per cent per annum over the next five years.