CRISIL - Acquires 'Coalition' at 2.4x EV/Sales - Emkay

CRISIL to acquire Coalition, for maximum of Rs2.5bn (linked to rev and PAT growth), spread over 2 years. Assuming a 50% growth in rev for CY12, the deal is valued at 2.4x EV/ Sales.

With 120 employees across four centers, revenue per employee of Coalition at Rs5.7mn is significantly higher than ~2.5-2.7 for CRISIL and Irevna.

The acquisition to enable CRISIL in widening its service offerings, and further improve client relationship. To drive RoE further to 67%/56% from 62%/53% in CY12/13 resp.

At CMP , the stock trades at 26.1x CY12E EPS of Rs40 and 21.2x CY13E EPS of Rs49. Maintain Accumulate rating with price target of Rs1,240.

Source : Equity Bulls

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