Blackstone to take controlling stake in R Systems, delist firm

NEW DELHI: In a first of its kind transaction for India’s capital markets, private equity major Blackstone will pick up a controlling stake in information technology (IT) services firm R Systems International Ltd for $359 million and simultaneously delist the firm from the exchanges.

Last year, the Securities and

Exchange Board of India (Sebi) had said investors can buy a controlling stake in a listed company and also initiate the process of buying back its shares from the company’s public shareholders. Earlier, investors picking up a controlling stake in a listed company had to launch an open offer for 26% public shareholding and only after a certain cooling off period were they allowed to launch a delisting offer.

Sebi’s move is aimed at making the mergers and acquisitions of listed firms more attractive for financial as well as strategic investors, especially foreign investors who may not be keen to run a listed entity in India.

R Systems was founded in 1993 by Satinder Singh Rekhi. It provides digital IT services and specializes in product engineering. It serves more than 250 customers in technology, media, telecom, and financial services sectors, globally.

R Systems serves enterprise customers with a varied suite of capabilities in product engineering, artificial intelligence, data analytics, the Internet of Things, robotic process automation and cloud, employing over 4,400 people at 18 delivery centres across Asia Pacific, North America, Europe, and India.

Rekhi, along with the other promoters, hold 51.67% in the company. Blackstone will sell the stake at ₹245 per share and will simultaneously launch a conditional delisting offer at ₹246 apiece. The promoter stake acquisition will cost ₹1,497.68 crore for Blackstone. The delisting move will offer to buy 57.1 million shares, or 48.33%, from the public shareholders for ₹1,406 crore. “R Systems has been a reliable longterm partner to marquee global customers, guiding them on their digital transformation journey. Its domain knowledge, service quality and global delivery centres make them a partner of choice for all customers. As a leader in outsourced software product development, it is well-positioned to benefit from digitization tailwinds, shorter product launch cycles and increased openness to outsource product development,” said Mukesh Mehta, senior managing director, Blackstone.