Chennai, Dec 7 (IANS): In one of the biggest acquisition deals in the competitive exam training institute sector, the city-based Rs.4,000 crore Kalpathi Group's Veranda Learning Solutions has acquired Chennai Race for Rs.100 crore, said a top group official.

"This is a profitable acquisition for us. Chennai Race is Rs.45 crore revenue and Rs.11 crore profit company. There is scope for expansion. We can expand it for other state government jobs in several regional languages," Suresh Kalpathi, CEO, Veranda Learning Solution said.

The acquisition consideration includes stock and earn out.

Chennai Race has trained over 200,000 students so far backed across the states of Tamil Nadu, Kerala, Karnataka, and Punjab.

About 30 lakh people write the Tamil Nadu Public Service Commission exams and this itself is Rs.2,000 crore market, Kalpathi added.

"The Indian online education market, supported by macro-economic changes, improvements in product offerings and changes in business models, is expected to grow to $1.96 billion by 2021 and to $4.87 billion by 2024," he said.

According to Kalpathi, Chennai Race-now rebranded as Veranda Race- was promoted by bootstrapped first generation entrepreneur Bharath Seeman.

"Like us, they were very cost conscious and keep their costs as well as their training charges affordable," Kalpathi added.

Seeman will be heading the Veranda Race vertical.

According to Seeman, the Veranda Race programmes are set for a rollout nationally, in the coming months, targeting a revenue of Rs. 50 crores in the first year.

"By the end of 2021, our content will be available in 11 Indian languages and we would be training around 50,000 to 60,000 students across the country. We have priced our courses around Rs.7500 which includes course materials and mentoring support," Seeman said.

"At Veranda Race the key metric to assess our success will be 'number of students getting jobs', which is the main goal of this venture," Seeman added.

According to Kalpathi, online aggregation of service providers may happen in the sector but the field is entirely different as offline will come back once the Covid-19 fears disappear.

In 1991 Kalpathi, along with his two brothers Kalpathi S. Aghoram and Kalpathi S. Ganesh set up SSI Ltd as an IT training provider in Chennai.

The SSI later acquired Aptech and grew into a global provider of education, consultancy & software services. It went on to become the first Indian IT company to be listed on the London Stock Exchange.

Veranda Learning will offer training programmes in test preparation for all competitive exams in India and abroad, including IIT JEE, NEET, GRE/TOEFL/IELTS/GMAT, IAS, State PSC, Banking/Staff Selection/RRB, CA/ACS related exams, Medical, K-12, NTSE and Olympiads.

It will also offer courses in software development namely databases, languages, development tools, cloud/analytics/big data/AI/ML platform.

Kalpathi said the fee structure will be 50-75 per cent economical than the offline version.

"The discipline and rigour of the offline classes are missing in the online model. A customer is interested in outcome. We will have the rigour of the class room coaching in our online classes," he said.