KKR in talks to sell Aricent in a deal worth up to $1.5 bn

Mint ST - - DEALS - BY REGHU BALAKR­ISH­NAN reghu.b@livemint.com MUM­BAI

JP Mor­gan hired to find a buyer for PE firm’s 79% stake

Global pri­vate eq­uity firm KKR and Co. LP is in early stages of dis­cus­sions to sell Aricent Inc., a Cal­i­for­ni­abased global soft­ware firm with a strong pres­ence in In­dia, in a deal worth $1-1.5 bil­lion, ac­cord­ing to two peo­ple aware of the de­vel­op­ment.

KKR has hired JP Mor­gan to find a buyer for Aricent, in which KKR holds about 79% stake. French tech­nol­ogy en­gi­neer­ing con­sult­ing ser­vices firm Al­tran is among the par­ties in­ter­ested in ac­quir­ing the as­set, the first of the two per­sons said on con­di­tion of anonymity. Aricent, pre­vi­ously known as Flex­tron­ics Soft­ware Sys­tems, was spun off from Flex­tron­ics in 2006 when KKR ac­quired a ma­jor­ity stake in it. KKR had in­creased its stake from 62.5% to 79% in 2009. Aricent, which claims to em­ploy 12,000 con­sul­tants, de­sign­ers, and en­gi­neers at 19 lo­ca­tions world­wide, has of­fices in Bengaluru, Gurugram, Pune, Hy­der­abad, Noida and Chennai.

“KKR is en­gaged in talks with other pri­vate eq­uity in­vestors and strate­gic buy­ers. How­ever, the chances are high for the global strate­gic in­vestors,” said the sec­ond per­son on con­di­tion of anonymity.

Se­quoia Cap­i­tal also owns a mi­nor­ity stake in Aricent.

Spokesper­sons with KKR, JP Mor­gan and Al­tran de­clined to com­ment, while mails sent to Aricent and Se­quoia went unan­swered.

A global leader in En­gi­neer­ing and R&D ser­vices (ER&D), the Paris-based Al­tran of­fers prod­ucts and ser­vices in the ar­eas of aero­space, au­to­mo­tive, de­fence, en­ergy, fi­nance, life sciences, rail­way, and tele­com. In 2016, the Al­tran group gen­er­ated rev­enues of €2 bil­lion ($2.3 bil­lion). With a head­count of more than 30,000 em­ploy­ees, Al­tran is present in more than 20 coun­tries.

Al­tran In­dia, founded in 2004, with head­quar­ters in Bengaluru and of­fices in Coim­bat­ore, Noida and Chennai, has strength­ened its po­si­tion in the coun­try through a num­ber of buy­outs in the last few years. In 2015, Al­tran made its first deal in In­dia with its ac­qui­si­tion of Ban­ga­lore-based start-up Si­con De­sign Tech­nolo­gies Pvt. Ltd, for an undis­closed amount.

In Fe­bru­ary 2017, Al­tran had ac­quired Pri­col Tech­nolo­gies, a Pune-based en­gi­neer­ing so­lu­tions provider.

In Septem­ber, Al­tran bougth Glob­aledge Soft­ware Ltd, a Bengaluru-based prod­uct en­gi­neer­ing firm spe­cial­iz­ing in em­bed­ded soft­ware and IOT So­lu­tions. In In­dia, Al­tran em­ploys 2000 peo­ple.

In the en­gi­neer­ing ser­vices space in In­dia, Al­tran com­petes with do­mes­tic firms such as Wipro, TCS Ltd, HCL Tech­nolo­gies Ltd and other global firms like France’s Al­ten, Akka Tech­nolo­gies, Ger­many-based Ber­trandt AG and Aus­tria-based AVL List Gmbh. If the deal ma­te­ri­al­izes, it would be an­other suc­cess­ful exit for KKR from its In­dian port­fo­lio in 2017.

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