Intimation attached
LTM · price
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LTM Limited announced a strategic deal with Randstad Group comprising three components: (1) Proposed acquisition of Randstad's technology and consulting services business in Europe and Australia with annualized revenue of €469 million (~USD 500 million) at an enterprise value of €160 million; (2) Five-year IT services partnership to enable Randstad's GCC in India with initial scope of ~$55-60 million TCV; (3) MSP partnership for managing LTM's subcons with cost savings. Management acknowledged revenue declined 10% over past two years due to macroeconomic challenges in Europe, seller trimming tail accounts, and clients setting up their own GCCs. They emphasized the acquisition targets are completely white-space for LTM across geographies and verticals including aerospace, defense, automotive, utilities, telecom and BFS. Management stated there will be no material impact on margins/EBIT and expects deal to be EPS accretive from day one. The acquired entity will be operated as a separate subsidiary. LTM's revenue per employee is about one-third of the acquired business due to higher near-shore/onsite mix.
The acquisition provides LTM access to €469 million revenue in white-space markets (Europe, Australia) with marquee clients in aerospace, defense, auto and BFS, potentially doubling revenue in 5 years as per their strategy. Management expects minimal margin impact and EPS accretion, though near-term revenue trajectory remains uncertain as they focus on marquee accounts over tail accounts.