NIIT Tech forms JV with US firm; eyes $85 mn revenue in 5yrs

NEW DELHI: IT firm NIIT Technologies on Wednesday said it has formed a joint venture with US-based media company Morris Communications, a move that will help the Indian firm strengthen its foothold in the media sector.

The 60-40 JV, between NIIT Technologies US (60 per cent) and MStar (the shared services center of Morris Communications) (40 per cent), will be called 'NIIT Media Technologies'.

NIIT will invest USD 3 million in the joint venture. "Under the terms of the agreement, Morris will transfer its key assets -- including IT infrastructure, about 100 persons and applications landscape -- to the JV," NIIT Technologies CEO Arvind Thakur told reporters here.

Also, the JV will provide integrated IT and BPO services to Morris Communication, ensuring revenues of USD 85 million over a period of five years, he added.

The revenues will start accruing from the October- December quarter of the ongoing fiscal, Thakur said.

Three people will be on board of the JV, while Morris will be represented by two people.

Apart from providing IT solutions to Morris, the JV will also tap the media sector in the North American region.

"This is a strategic transformational deal which enhances our onshore presence. Also, through this deal, we are kind of foraying into the media space and will offer solutions to other media companies in the US as well," Thakur said.

Morris' holdings include 13 daily newspapers, 33 radio stations and two radio networks, two book publishing and distribution houses, many magazines and two event marketing companies.

Asked about its strategy on the media sector, Thakur said the transition will take about six months to complete and will take time to have a strategic plan in place. "By the end of the year, we will have greater clarity on how the segment (media) is to be approached," he added.

NIIT Technologies has a strong focus on travel and logistics; manufacturing and distribution; and banking, financial services and insurance.