In a significant move, CL Educate Limited has announced the execution of a Share Purchase Agreement (SPA) on January 31, 2025, marking a milestone in its growth trajectory. This agreement pertains to the acquisition of the Digital Examination Business (DEX) of NSEIT Limited, a subsidiary of NSE Investments Limited, which is in turn a step-down subsidiary of the National Stock Exchange of India Ltd. (NSE).

This acquisition follows a Board of Directors’ approval dated August 29, 2024, and it represents a strategic expansion of CL Educate's presence in the digital education sector. The Proposed Acquisition involves the purchase of 100% shareholding in NSEIT Limited, with an initial consideration of Rs. 230 Crores in cash. The deal also includes an additional deferred consideration of up to Rs. 75 Crores, which will be paid subject to the achievement of certain business targets outlined in the Share Purchase Agreement.

NSEIT Limited is a well-established player in the digital examination space, providing innovative solutions that cater to the evolving needs of education and examinations. By acquiring this business, CL Educate aims to enhance its digital capabilities and expand its portfolio in the ed-tech sector.

The execution of this agreement follows a detailed process, with the ultimate consummation of the acquisition still subject to the fulfillment of conditions precedent as stipulated in the Share Purchase Agreement. This highlights the careful consideration and due diligence undertaken by CL Educate in ensuring that the acquisition aligns with its long-term strategic goals.

The Share Purchase Agreement clearly outlines the terms of the deal, including the conditions for the deferred payments, which will be based on the performance of the acquired business. CL Educate will also pledge 15% of the equity share capital in NSEIT Limited in favor of the seller and provide a bank guarantee of Rs. 5 Crores as part of the transaction.

Key Highlights of the Share Purchase Agreement

• Parties Involved: The transaction involves NSE Investments Limited as the seller, CL Educate Limited as the purchaser, and NSEIT Limited as the target company.
• Transaction Size: The initial consideration is Rs. 230 Crores, with additional payments contingent on business targets, potentially reaching Rs. 75 Crores. The deal also includes a deferred consideration structure based on further contingencies.
• Equity and Guarantee: As part of the agreement, CL Educate will pledge 15% of NSEIT’s equity shares and provide a bank guarantee of Rs. 5 Crores to secure the transaction.

This acquisition is a crucial step for CL Educate as it seeks to bolster its presence in the digital education space. With the growing demand for online education and digital examination solutions, the acquisition of NSEIT’s digital business provides CL Educate with a strategic opportunity to expand its portfolio and enhance its service offerings.

The execution of the Share Purchase Agreement aligns with CL Educate's ongoing efforts to strengthen its position in the Indian education sector, particularly in the digital and online examination space. This move is expected to drive significant growth in the company's operations and offer a competitive edge in the evolving market.

Regulatory Compliance
As part of the transaction, CL Educate has ensured full compliance with SEBI's Listing Obligations and Disclosure Requirements (LODR) and the SEBI Circular dated July 13, 2023. This demonstrates the company's commitment to transparency and good governance, adhering to the regulations set out for public companies.

The acquisition is not a related party transaction, and there are no conflicts of interest that could affect the fairness or transparency of the deal. The parties involved, including NSEIT Limited and NSE Investments Limited, are not related to the promoter group of CL Educate in any manner.

This transaction is a testament to CL Educate’s focus on growth and strategic acquisitions in the education and technology sectors. The company aims to leverage the synergies between its existing operations and the acquired digital business to create new opportunities and provide enhanced services to its customers.

Future Prospects and Growth
With the execution of this acquisition, CL Educate is set to expand its footprint in the ed-tech industry, which is experiencing significant growth, particularly in the digital education and examination services sector. The digital education market in India is expected to continue expanding, with a growing demand for online learning, digital assessments, and ed-tech solutions.

The addition of NSEIT Limited’s Digital Examination Business to CL Educate’s portfolio will strengthen the company’s ability to offer innovative and scalable education solutions. This acquisition is a strategic move that positions CL Educate for long-term success in the rapidly evolving digital education landscape.

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