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Blackstone has signed agreements with Satinder Singh Rekhi and other promoters to purchase a majority stake in R Systems International Limited for $359 million.
Rekhi and the other promoters currently hold about 52 per cent stake in R Systems, which Blackstone will acquire at ₹245 per share. Blackstone will also launch a conditional delisting offer, at ₹246 per share. The transaction is expected to be completed in the coming months, subject to customary closing conditions and regulatory approvals. Rekhi will continue to guide the company as a non-executive advisor.
The share price of R Systems zoomed 15.66 per cent to close at ₹271.10 on BSE with its market-cap touching ₹3,200 crore. A key condition of the open offer is that Blackstone can cancel the stake purchase deal if 38 per cent stake in the company is not tendered in the open offer. Here, Bhavook Tripathi, a Mumbai-based investor holds the key. He is the largest non-promoter shareholder of R Systems with 36.93 per cent stake (1.40 per cent held via another entity). R Systems’ promoters own 51.67 per cent stake in the company. Hence, if Blackstone acquired full promoter stake and Tripathi tendered its stake, it is only then that the private equity players will be able to delist the company.
Mukesh Mehta, Senior Managing Director at Blackstone, said, “This investment follows Blackstone’s long-standing conviction in IT services and builds on the firm’s robust track record in the sector globally. We are excited to partner with the current management team to support the company’s next phase of growth, both organically and through strategic acquisitions. I am aware of the great work that Dr Rekhi has done in the field of the science of happiness, and the Blackstone team is looking forward to working with him.”
Rekhi, CEO of R Systems, said, “I am excited that our partnership with Blackstone will take R Systems on the path to its next level of growth. Our employees, customers, and partners will gain immensely from this partnership with Blackstone. I am happy for my new role as an advisor to the company under Blackstone’s ownership.”
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R Systems, founded in 1993 by Rekhi, provides digital information technology services, specialising in product engineering, to over 250 customers in the technology, media, telecom, and financial services sectors globally. It employs over 4,400 people across 18 delivery centres in North America, Europe, Asia Pacific, and India.
R System’s revenue for the last 12 months, as of September 30, 2022, was ₹1,445 crore (about $189 million), registering a 36 per cent year-on-year growth.
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