Veranda Learning Announces Acquisition of Tapasya Educational Institutions for a Minimum of $44 Million

Veranda Learning Solutions Ltd is poised to acquire Tapasya Educational Institutions Pvt as part of its ongoing expansion strategy within the education sector for a minimum of Rs 362.40 crore (approximately $44 million). 


The Kalpathi Group company, based in Chennai, disclosed the acquisition plan in a statement on Friday.


Veranda will conduct the acquisition in three stages, with the initial phase involving the purchase of a 50% stake in Tapasya by March 31 for Rs 120 crore ($14.5 million). 


Subsequently, in the second stage, scheduled for April 2024, Veranda will acquire an additional 1% stake for Rs 2.40 crore. 


Contingent on Tapasya‘s net current assets at the respective times, Veranda may make other payments at each stage.


The final stage of the acquisition will involve Veranda acquiring the remaining stake around the expiration of four years from the first stage, likely in early 2028. The amount payable will be determined based on Tapasya’s performance in 2027, with a floor price of Rs 240.00 crore. 


Furthermore, Veranda will make additional payments based on Tapasya’s free cash flows from the fiscal year 2023-24 up to the date of the third tranche.


Veranda emphasized that the acquisition aligns with its strategic goal of reinforcing its presence in the higher education segment, specifically in the commerce domain. 


Suresh Kalpathi, Veranda’s Executive Director and Chairman expressed confidence in reaching 1 million students in FY24, citing this move as instrumental in achieving that objective. 


He highlighted Tapasya’s presence in Telangana and Karnataka, stating that it complements Veranda’s expansion strategy.


Established in 2009, Tapasya serves 29 colleges across 13 locations in Telangana and Karnataka, primarily in commerce and business studies and professional courses like chartered accountancy. 


Tapasya is expected to report revenue of Rs 65 crore and EBITDA of Rs 26 crore for the fiscal year 2023-24.


Veranda debuted its stock exchange in 2022 and has been on an aggressive growth trajectory. Last year alone, the company acquired seven businesses, spending Rs 400 crore and bringing its total expenditure to Rs 1,000 crore by then.


Veranda specialises in preparing candidates for competitive exams, offering training programs that encompass a variety of tests, such as state and central civil services, banking, insurance, railways, and chartered accountancy.