Blackstone to acquire a majority stake of 52% in R systems for $359 million

R Systems, founded in 1993 by Rekhi, specializes in digital information technology services, specializing in product engineering, and serves over 250 customers in the technology, media, telecom, and financial services sectors globally.

Private equity player Blackstone is set to acquire a majority stake in digital services and product engineering firm R Systems for Rs 2,904 crore ($359 million). This includes the 52 percent stake held by founder Satinder Singh Rekhi and other promoters.

Blackstone is buying the promoters’ stake for Rs 245 per share, a premium of 3.9 percent on the current price of Rs 235.8 per share. The promoters will get around Rs 1,496.95 crore for their 52 percent stake.

The PE player will also launch a conditional delisting offer, at a price of Rs 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 in his role as a non-executive advisor, said Blackstone in a statement.

R Systems, founded in 1993 by Rekhi, specializes in digital information technology services, specializing in product engineering, and serves over 250 customers in the technology, media, telecom, and financial services sectors globally. The company is employing over 4,400 people across 18 delivery centers in North America, Europe, Asia Pacific, and India. R System’s revenue for the last twelve months, as of September 30, 2022, was Rs 1,445 crore ($189 mm), registering a 36 percent year-on-year growth.

Mukesh Mehta, senior managing director at Blackstone, said: “Their domain knowledge, service quality, and global delivery centers make them a partner of choice for their customers. As a leader in outsourced software product development, R Systems is well-positioned to benefit from digitalization tailwinds, shorter product launch cycles, and increased openness to outsourcing product development. This investment follows Blackstone’s long-standing conviction in IT services and builds on the firm’s robust track record in the sector globally.”

BDA Partners acted as the financial advisor to the sellers of R Systems. AZB & Partners acted as legal advisors to the sellers. KPMG, Cyril Amarchand Mangaldas, and Simpson Thacher & Bartlett acted as advisors to Blackstone.