Coforge Limited, a global IT solutions organization, today announced that it has signed definitive agreements to acquire a controlling interest in SLK Global Solutions Private Limited (SLK Global), a business process transformation enterprise offering BPM and digital solutions for the financial services industry.
A fast-growing business with a robust operating profile, SLK Global has deep domain expertise in the banking and insurance segments in North America. It enjoys multiple long-standing and scalable relationships with marquee clients with strong growth potential, including with Fifth Third Bank, N. A., which in addition to being the largest customer, is also a significant minority shareholder. It has also created a suite of platform solutions that provide a differentiation to its clients.
Coforge shall initially acquire 60% stake in SLK Global, with SLK Global’s founders completely exiting. Fifth Third Bank’s stake in the company will be reduced to 40% and shall continue at that level for the next 2 years. Coforge will acquire an additional 20% stake from Fifth Third Bank after the completion of 2 years, the company said in a statement.
As part of the transaction, Fifth Third Bank has committed to remaining a significant customer of SLK Global and has also committed a base volume over 5 years starting FY’22.
“We are very excited to welcome SLK Global and its over 7,000 employees into the Coforge family. We are equally excited and committed to the new partnership and client relationship that we have now formed with Fifth Third Bank. Fifth Third Bank shall be a Top 5 client of the firm and as our valued JV partner we look forward to creating a deep and mutually rewarding partnership with them in the years to come,” said Sudhir Singh, Chief Executive Officer, Coforge Ltd.
“We expect very strong business synergies to be generated through this transaction. This differentiated, high growth, margin accretive business further strengthens our position in the North America Financial Services Industry and our BPM business. Coforge’s technology and digital capabilities will be highly relevant to SLK Global’s customer base that includes several marquee names in the BFS and Insurance industries, while the latter’s capabilities will enable Coforge to compete more effectively for deals that have a major BPM/BPO operations component. SLK Global also provides Coforge with an attractive tier 3 India city delivery location”, Sudhir added.
“Fifth Third Bank is excited about the opportunities created by this new partnership. We remain committed to our BPM strategy and the expanded automation capabilities afforded by an IT solutions provider of Coforge’s caliber. We look forward to extending with our new partners the long-term relationship we have enjoyed with SLK Global for the past 15 years,” said Jude Schramm, Executive Vice President and Chief Information Officer, Fifth Third Bank.
The transaction is being funded by Coforge with a combination of internal accruals and external borrowings.
Post-closing, the key management personnel, excluding the founder-promoter, will stay on and contribute to its continued growth.
KPMG acted as the advisor to Coforge and J Sagar Associates as its legal counsel on this transaction. Avendus Capital acted as the investment banker to all the Sellers and Prabir Talati/Inflexion Advisers as the advisor to the Founders and SLK Global, while Quillon Partners acted as Transaction Counsel and Shardul Amarchand Mangaldas & Co acted as Legal counsel to Fifth Third Bank.
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