Css corp

Startek acquires 26% stake in CSS Corp for $ 30 million

Bombay: NYSE-listed Startek BPM, which had merged with Indian firm BPO, invested $ 30 million in IT services firm CSS Corp in a limited partnership managed by Startek’s majority shareholder, Capital Square Partners.

Startek will acquire 26% indirect beneficial interest in CSS. He will also have the possibility of acquiring a majority stake in the company. The company said in a statement, however, that the option to acquire a controlling stake was at its discretion and that Startek was not obligated to do so.

The acquisition was funded by a new $ 185 million senior debt facility from CSP Alpha Holdings, which is a wholly owned unit of Startek. The total debt refinancing consists of a term loan of $ 165 million and a revolving credit facility of $ 20 million.

Aparup Sengupta, executive chairman and global CEO of Startek, said the acquisition will strengthen the company’s digital capabilities.

“Our investment in CSS accelerates our digitization initiatives and marks an important inflection point for Startek. ”

He added, “CSS is a strong IT services company providing mission-critical AI, automation, analytics, cloud and digital solutions to a growing technology customer base on five continents. Building on the success of our omnichannel Startek Cloud platform in 2020, we continue to view our digital services as a key long-term driver of future revenue growth and margin expansion. ”

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The company also announced its fourth quarter results for the quarter ended December 31, 2020. Startek recorded a net loss of $ 7.6 million during the period, compared to a net loss of $ 5.3 million in the period. quarter of the previous year.

The net loss included a goodwill impairment of $ 13.2 million due to the expected decline in Covid-19 related activities in India, South Africa and Australia, and Argentina mainly related to the local currency devaluation. , according to the company.

Adjusted net income increased 50% to $ 8.8 million, compared to adjusted net income of $ 5.8 million for the prior year quarter. Net sales reached $ 174.5 million, compared to $ 171.6 million in the previous year quarter.

The increase in net sales is explained by better customer demand during the quarter. At constant exchange rates, net sales increased by 4.7%.

Sengupta said, “While the fourth quarter is historically our best quarter of the year, we have also benefited from seasonality trends within our existing customer base, including favorable e-commerce winds around the holiday season. . ”

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