Blackstone Group will acquire R Systems

18 Nov 2022 , 02:24 PM

In the first such M&A deal since the market regulator amended delisting rules in December, US private equity firm Blackstone Group has agreed to invest $359 million (the equivalent of Rs2,904 crore) to acquire a majority stake in R Systems International (R Systems) from its current promoters and will launch an open offer to take the company private.

According to analysts speaking with ET, the acquisition might serve as a model for other M&A deals that are supported by majority private equity ownership of listed assets and ultimately result in the delisting of publicly traded businesses.

Satinder Singh Rekhi and other promoters, who together own 52% of the company, will sell their shares to Blackstone.

In addition to making a conditional delisting offer at a price of Rs246 per share, Blackstone will pay Rs245 per share.

In the upcoming months, the acquisition is anticipated to close, pending customary closing requirements and regulatory clearances. Rekhi will continue to lead the business as a non-executive advisor, according to a statement from the company.

The Securities and Exchange Board of India (SEBI) modified laws regarding the delisting of equity shares of a firm following an open offer as part of attempts to make merger and acquisition transactions for listed companies more straightforward, therefore the transaction will be the first of its kind.

According to a statement made by SEBI in December, the updated framework intends to make M&A for publicly traded companies a more convenient and reasonable exercise while balancing the interests of all investors.

According to new SEBI regulations, all shareholders tendering their stock will get the indicated price if the open offer response results in the delisting requirement of 90% being fulfilled.

As of September 30, 2022, the company had year-over-year revenue growth of 36%, reaching Rs1,445 crore (about $189 million) over the previous twelve months.

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