Transaction:
- Blackstone, an American private equity fund, announced that it would pick up a majority stake of 52% of present promoters including of founder Dr. Rekhi, in R Systems International, a digital services firm, for Rs. 2,904 Crores.
- Blackstone will also launch a conditional delisting offer, at a price of Rs. 246 per share. The delisting move will offer to buy 57.1 million shares, or 48.33%, from the public shareholders for Rs. 1,406 Crore.
About Blackstone:
- Founded in 1985 as a mergers and acquisitions firm by Peter G. Peterson and Stephen A. Schwarzman Blackstone Inc. is an American alternative investment management company based in New York City.
- As of Q3 2022, the company’s total assets under management were over US$950 billion, making it the largest alternative investment firm globally.
About R Systems:
- Founded in 1993 by Satinder Singh Rekhi, the company is provider of digital Information Technology services, specializing in product engineering and serves over 250 clients in tech, media, telecom and financial services globally.
- R System has capabilities in product engineering, AI, data analytics, IOT and cloud and has over 4,400 employees in 18 delivery centers in North America, Europe, Asia Pacific, and India.
- R System’s revenue in the 12 months ending September 2022 was Rs. 1,445 Crores, which is a 36% year-on-year growth.
Rationale:
- This investment follows Blackstone’s longstanding conviction in IT services and builds on the firm’s robust track record in the sector globally. Blackstone has invested into Indian firms like Mphasis, VFS, TaskUs IBS software, Intelenet, and Simplilearn, amongst many others.
- The company’s management team will benefit from Blackstone’s scale, expertise, and global track record in IT services.
- “As a leader in outsourced product development, R Systems is well-positioned to benefit from digitalization tailwinds, shorter product launch cycles and increased openness to outsource product development,” Blackstone Senior Managing Director Mukesh Mehta said in the press release.
- Founder of R Systems, Satinder Singh Rekhi will continue to guide the company in his role as a non-executive advisor.
Acknowledgements:
RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)
Disclaimer:
This material has been prepared by the personnel in Vora Corporate Finance which is Investment Banking arm of Vora Management Consultancy Private Limited and looks after Mergers & Acquisitions (M&A), Private Equity (PE), Fund Raising, Debt syndication and Valuations and is based out of Ahmedabad, Gujarat, India. Any views or opinions expressed herein are solely that of individual authors and may differ from view of Vora Management Consultancy Private Limited. This material is proprietary to Vora Management Consultancy Private Limited and is for your personal use only. Any distribution, copy, reprints or forward to others is strictly prohibited.
This material captures the information based on information available in the public domain, public announcements and sources believed to be reliable. Analysis contained herein is based on publicly available information and appropriate assumptions. This material is intended merely to highlight market developments and is not intended to be comprehensive and does not constitute strategic, investment, legal or tax advice. In no event Vora Management Consultancy Private Limited be liable for any use by any party or for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you for evaluating any transaction.
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