NIIT up 18% after US unit sells biz for $110 mn

Shares in software trainer NIIT rose more than 18 percent in early trade on Monday, after the firm said it sold its US unit’s entire stake in Element K Corp, a step-down subsidiary, to Ireland-based SkillSoft for $110 million.

NIIT had also signed a long-term strategic and licensing agreement with SkillSoft to become a product and content developer for the Irish firm, the Indian firm said in a statement on Saturday.

“This partnership will enable NIIT to rapidly expand its managed service business,” Vijay Thadani, chief executive, NIIT, said.

“We have been arguing that the stock is attractively valued - this transaction will result in value unlocking - we expect significant upside to the NIIT stock in the near term,” Citi said in a research note.

The transaction will also make NIIT a debt-free company as it had net debt of around $60 million at the end of the June- quarter, the note said.

At 9:56 a.m., NIIT shares were up 14.17 percent at 49.95 rupees in a firm Mumbai market.

Reuters

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