The CK Birla Group owned
Birlasoft joins KPIT promoters in launching an open offer for
the minority shareholders of KPIT. Birlasoft will work closely with KPIT
to first merge into KPIT and later split the combined entity of
Birlasoft + KPIT into two public companies: A USD 500+ million Enterprise
Digital Business IT Services Company (‘Birlasoft’), and a USD 200+ million
company focused on Automotive Engineering and Mobility Solutions (‘KPIT
Technologies’).
Transaction Highlights
· Creates a new leader in the mid-tier IT services space: The new
Digital Business IT Services company will grow the Birlasoft brand
by combining it with the KPIT ITSS business, which is a world
leader in Digital Enterprise Solutions (SAP, JD Edwards, Oracle), IoT, Cloud
and Digital Transformation
· Creates new KPIT Technologies, global leader in Automotive
Engineering and Mobility Solutions, which will evolve from the current
Engineering business of KPIT.
At the conclusion of the deal, two new companies will be
created. The new ‘Birlasoft’ will be a USD 500 million Digital Business IT
Services company that will be created by merging the KPIT ITSS business with
the current Birlasoft, creating a new leader in the mid-tier IT services space
which will also be called Birlasoft.
The new ‘KPIT Technologies’ will be a USD 200+ million focused
Engineering Services company that will be created by tapping into the current
Engineering business of KPIT to create a global leader in Automotive
Engineering and Mobility Solutions.
Commenting on the partnership, Amita Birla, Chairman of
Birlasoft said “Digital solutions are today not confined to the
periphery of business but are transforming the very core of business processes.
The digital age requires each organisation to reinvent itself to address and
lead the disruption and opportunities it brings. With this, Birlasoft will
expand its industry leading capability in Enterprise solutions with unmatched
digital capability. We will become the leading ‘Enterprise Digital’ company in
the country that will advise its customers in unlocking value in their digital
journey.
Ravi Pandit, Chairman of KPIT, added that “The tremendous value created by KPIT over the
last 27 years will continue in two new avatars and become leading companies in
their respective spaces. Over the years, we have gained reputation as one of
the global leaders in Automotive Embedded Software. We will be focused on
building the KPIT brand as the foremost organisation in the world for
Automotive Engineering and Mobility Solutions. The world of Automotive and
Mobility are at the cusp of great change and we are excited to be at the
technology forefront in this global movement. While transitioning the “Business
IT Services” business to Birlasoft in the next year, our team will continue to
work with Birlasoft to ensure the best service to the KPIT Business IT
customers.”
The new ‘Birlasoft’, that will emerge over the next year, will
combine the management team and the IT Services business of KPIT with the
current Birlasoft. It will be led by Anjan Lahiri as the CEO and MD. The
company will have:
- The highest
percentage of business coming from core enterprise systems vis-à-vis any
other competitor
- Unique,
industry leading capabilities from the Enterprise Product and Cloud
companies: SAP, Oracle, JDE and Salesforce.com.
The company will have the highest level of partnership with SAP, Oracle as
well as with Salesforce, a position unmatched by any other similar
company
· Significant ‘Digital’ capability in Analytics,
RPA (Robotic Process Automation), Digital Portals, User Experience and Digital
advisory services
· Significant capability and presence in
Application Development, Support and Maintenance for Next Generation Services
in the digital world
The new KPIT Technologies will leverage KPIT’s expertise
in Automotive and Mobility, and will be led by Kishor Patil as the
CEO and MD. This company will deepen the relationship with global Automotive
and Mobility leaders in fulfilling their engineering needs. The company will
continue to enhance its expertise in all the features to deliver cleaner, safer
and smarter solutions to the world of Automotive and Mobility.
Advisors To The Transaction
- Advisor to The CK Birla Group
and Birlasoft: Kotak Investment Banking
- Advisor to KPIT: Avendus
Capital Private Limited
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