Quess Corp Announces Three-Way Demerger

The Board of Directors of Quess Corp, in their meeting held today, approved a composite scheme of arrangement providing for the demerger of Quess Corp into three independent entities.

The demerger will ultimately result in three separate listed companies, namely:

1.    Quess Corp: Workforce Management (Remaining Company)

2.    Digitide Solutions: BPM solutions, Insurtech and HRO business (New Co.1)

3.    Bluspring Enterprises: Facility Management, Industrial Services and Investments (New Co.2)

The platforms include Workforce Management, the largest staffing firm in India and among the top 5 globally, by headcount; Global Technology Solutions, among the leading domestic BPM and payroll services firms; Operating Asset Management, the largest facility management platform in India by the breadth of services offered; and Product-Led Businesses (foundit, the second-largest talent acquisition platform in India). Overall, Quess has achieved scale in each platform, and they are strategically, operationally, and financially positioned to become independent companies with a focus on growing in their chosen area.

The three entities are ideally placed to capitalise on India’s growth trajectory as the country marches towards a $5 trillion economy.

The rationale for the demerger:

·         Simplified corporate structure by separation of scaled platforms into independent entities, each with a strong market positioning

·         Enhanced strategic clarity and management focus to accelerate profitable growth

·         Optimal capital allocation strategy for each entity to invest behind its strategic priorities

·         Flexibility for each entity to pursue independent and differentiated strategies to drive value creation

·         Ability for each entity to create a compelling investor proposition and attract investors

Upon effectiveness of the scheme, all shareholders will receive one additional share for each of the new companies, for every share held in Quess Corp. This process of demerger is expected to take between 12-15 months, to achieve regulatory clearances.

Commenting on the demerger, Chairman Quess Corp, Ajit Isaac said, “This is a landmark moment for Quess and is a transformational decision to create three separate entities. It helps the management to focus, develop capital allocation plans relevant to each business, and create value for our shareholders. The decentralized structure at Quess has enabled a pathway for the three demerged entities to continue a culture of entrepreneurship, an employee-friendly workplace with customer centricity being at the core of our purpose.

“We believe that the heavy lifting to create these entities has been done and it is now time to unlock value through this demerger.”

Commenting on the demerger, Chairman and CEO of Fairfax Financial Holdings Ltd., largest shareholder Prem Watsa said, “I am delighted with the decision of the Board of Quess Corp Ltd. to demerge into three separate entities. Each of these entities will be a market-leading player with the ability to leverage opportunities that come their way through its renewed focus. From the time we initially invested in Quess Corp Ltd., in 2013, the company has become one of the largest domestic employers in India and has the potential to develop as a significant business services player on a global scale.” “We are confident that this strategic initiative will benefit all shareholders and ensure that the management team gets the support to achieve the set-out goals from the demerger.”