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|August 24, 1998||
NIIT may acquire US training instituteNIIT Limited, the computer education major, is mulling over acquiring a training institute in the United States. This is part of its strategy to become a global leader in the sector.
The company, which has a wholly owned subsidiary in the US, is also considering an American Depository Receipt issue to mop up funds for the proposed acquisition, a senior company official has said.
The Delhi-based Rs 4.31-billion company has set an ambitious target of becoming the biggest IT education trainer in the world by 2002 and it views the Americas as a big market, he said.
NIIT's global alliance organisation has been entrusted with the task of scouting for a suitable acquisition. "But an acquisition is only one among the many options,'' Pawar said.
"We have not zeroed in on any particular firm right now. We may even go for a joint venture with a US firm instead of an acquisition,'' he said.
He, however, admitted that going it alone in the US would be difficult for NIIT and that a buy out is the easiest way to establish the company there.
Pawar said the company has not decided upon the proposed ADR issue and in any case it would be launched only next year.
"Our internal accruals this year would be around Rs 1 billion and we also have a rather low debt equity ratio of 0.36. Perhaps we may not even have to go for the GDR issue,'' he said.
Financing for the expansion plan is not a major issue for the company and it is more concerned with maintaining the image of NIIT abroad, he said. "We are looking for an institution that falls in the same category where we are - software and computer training. Besides the cultural fundamentals of both the firms should also match,'' Pawar said.
The decision on a firm to be acquired would be taken only after analysing the leverage and market access NIIT would gain through such an acquisition, Pawar said.
NIIT, which has a number of fully owned subsidiaries in South East Asia and a joint venture in China, may even retain the brand equity of the company it would acquire depending on the circumstances, he added.
- Compiled from the Indian media
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