In all, CAC is likely to infuse Rs.130 cr in the entire deal

Japan-based CAC Corporation will acquire a 51 per cent stake in Accel Frontline Ltd. (AFL), making it the third “strategic” equity partner the Chennai-based IT company has roped in over the last decade.

AFL currently has an equity base of 24.26 crore, which will increase to 29.76 crore after the fresh equity is brought.

The $400-million Japanese IT firm will acquire 51 per cent of equity shareholding through purchase of equity shares from promoters. It will also subscribe to the company’s new equity and purchase equity shares from public shareholders through offer for up to 26 per cent of the fully-diluted equity capital at Rs. 45 per equity share, according to a company release.

However, as part of the plan, CAC will also invest more equity in the company to expand its capital base. “At present, promoters hold 65 per cent in Accel Frontline, which will reduce to somewhere around 25 per cent after the transaction. In all, CAC is likely to infuse Rs. 130 crore in the entire deal,” N. R Panicker, Chairman, Accel Frontline, said, while addressing reporters here on Monday. Mr. Panicker also pointed out that the company would be run as a joint venture between CAC and the current promoters of AFL, and that he would remain as executive chairman.

“CAC will also provide long-term soft loans to the company. While CAC will gain an immediate platform in the Indian IT services market, we will have access to CAC’s relationships in Japan to provide IT service with India as a service hub,” he said.

Accel Frontline currently has revenue of $67 million, and employs around 2,000 people, according to a company release.

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