Private equity firm Apax Partners has inked an agreement to acquire the software products business of 3i Infotech Ltd for Rs 1,000 crore ($136 million), sealing its first India deal in almost two years.
The deal will help 3i Infotech repay all its debt, strengthen its balance sheet and expand other verticals including software services, the company said in a stock-exchange filing.
The business will be bought by Azentio Software Pvt. Ltd, which is wholly owned by funds managed by Apax.
Shares of 3i Infotech touched a one-year high on Monday, before paring the gains to close 2.74% higher at Rs 5.63 apiece in a strong Mumbai market.
This is Apax’s first India deal in nearly two years, according to VCCEdge, the data research arm of Mosaic Digital. Its previous India transaction was a $200 million investment in data analytics firm Fractal Analytics in January last year.
The UK-based PE firm invests mainly in four areas – technology and telecommunications, services, healthcare and consumer. Its other portfolio companies in India include Healthium Medtech Pvt. Ltd and Shriram City Union Finance.
The division being sold by 3i Infotech includes the business, intellectual property and employees in India, the US, the UK, Kenya and other countries. The company expects the acquisition to close by the end of March.
This software products business reported revenue of Rs 442.98 crore for 2019-20, representing 38.81% of 3i Infotech’s consolidated revenue.
The company reported consolidated net sales of Rs 1,141.32 crore for 2019-20 with a net profit of Rs 68.03 crore.
3i Infotech was originally incorporated in 1993. According to its website, it operates more than 24 offices around the world and employs more than 5,000 people.