Accel Ltd is open to selling part of its holding in Accel Frontline Ltd to either a private equity fund or a strategic partner, the Chairman of the Chennai-based Accel group, Mr N.R. Panicker, has told Business Line .

Last week, Accel Ltd bought out partner BT's 51 per cent stake in the company for about Rs 50 crore, paying Rs 43.50 a share. (On the NSE on Friday, the Accel Frontline share closed at Rs 41.20.)

Today, Accel holds 71 per cent in Accel Frontline, which is into a range of businesses under both IT hardware and software – including systems integration, remote infrastructure management and warranty management.

BT's presence

It was by a quirk of overseas M&A events that BT came into Accel Frontline, in 2008. When the British telecommunications major took over Frontline Technologies of Singapore, which was then a 42-per cent stakeholder in Accel, it bought additional 9 per cent stake from the Indian promoter, paying Rs 120 a share.

Accel Ltd, therefore, sold 9 per cent for $5 million to BT in 2008, and bought back 51 per cent for $11 million. The deal is reminiscent of the HCL – HP deal of the mid-1990s, when HCL sold stake to HP at about Rs 175 a share and bought back the shares at Rs 21 just a few years later.

Incidentally, Accel's promoter, Mr Panicker, once worked for HCL.

Restructuring

Now, with BT having exited, the Accel group is in the process of a restructure. Mr Panicker declined to give details, but it is clear that all the businesses of the group, except animation, would be put under Accel Frontline Ltd.

Animation would be under Accel Transmatic Ltd. A key component of the deal would be the takeover by Accel Frontline of the embedded software division of Accel Transmatic, called Ushus Technologies.

Sources close to the group note that after the restructure, Accel Frontline would resemble CMC Ltd, which is now a part of the Tata group, in terms of lines of businesses.

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