Updater Services Gains Full Control of Denave India with Strategic Share Acquisition

On August 20, 2024, Updater Services Limited (UDS) announced via a stock exchange filing that it had increased its investment in Denave India Private Limited, a material subsidiary, by raising its ownership from 67.27% to 89.57%. This was achieved by acquiring 37,48,614 equity shares from Denave’s promoters and other shareholders.

Additionally, Matrix Business Services India Private Limited, a subsidiary of UDS, holds the remaining 10.43% stake in Denave. As a result of this acquisition, UDS and its subsidiary now collectively own 100% of Denave.

This acquisition qualifies as a related party transaction under the Companies Act 2013 because Denave India Private Limited is a subsidiary of Updater Services Limited. The promoter group of Updater Services Limited has no direct interest in this acquisition apart from their shareholding in the company.

The transaction was conducted at arm’s length, ensuring fairness. No governmental or regulatory approvals were required for this acquisition, streamlining it and allowing for swift completion.

Objective of Acquisition

The acquisition was made to fulfil a commitment under a shareholders’ agreement between Updater Services Limited and the promoters of Denave India Private Limited. According to the agreement, Updater Services Limited was obliged to purchase the remaining equity shares from Denave’s promoters and other shareholders, further consolidating its control over the subsidiary.

Consideration and Cost of Acquisition

The acquisition was completed through a cash payment made via an online banking system. Updater Services Limited acquired 37,48,614 equity shares at a face value of ₹1 each for a total consideration of ₹525.70 million.

About Denave India Private Limited

Denave India Private Limited was incorporated on January 12, 1999, and specialises in sales enablement, support, and staffing services. The company operates primarily in India. As of March 31, 2024, the company reported a consolidated turnover of ₹4,542.83 million and a Profit After Tax (PAT) of ₹202.35 million for the same period, highlighting its financial strength and stability.

About Updater Services Limited

Updater Services Limited (UDS) provides integrated facilities management services and other offerings. Their services are tailored to meet the needs of various customer segments across multiple industries, including FMCG, manufacturing, engineering, banking, financial services, insurance (BFSI), healthcare, IT and IT-enabled services (IT/ITeS), automobiles, logistics, warehousing, airports, ports, infrastructure, and retail.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.