Carlyle, Apax, Temasek eyeing stake in KPIT Technologies

Private equity firms Carlyle Group and Apax Partners as well as Singapore state investment firm Temasek have evinced interest in buying a stake in Pune-based IT engineering services provider KPIT Technologies Ltd.

The Times of India reported, citing people familiar with the matter it didn't name, that the value of the deal could be around $150 million. 

Email queries sent to Carlyle did not elicit any response while Temasek, KPIT Technologies and Apax Partners declined to comment.

The Mumbai-listed company counts ChrysCapital and CX Partners among its private equity investors. Together, the two investors hold 13.86% and 3.23% stake in the company, respectively. 

Investment bank Avendus Capital is advising the company on the fundraise, the report said. The promoters held a 16.7% stake in the company as of June 2016.

Apax Partners had previously also invested in KPIT. Last year, it sold almost all of its small holding in the company, just over a year after investing in it, at a loss. The PE firm had acquired just under 2% stake of the company for around Rs 60 crore ($10 million), bulk of that from US-based Cummins Inc, a year ago. 

It is not clear if CX Partners would seek to exit its four-year investment. In early 2015, CX Partners made a partial exit by selling around a 2.5% stake in the company through an open market transaction for around Rs 106 crore.

CX Partners had originally put in Rs 63.5 crore in KPIT at the fag end of 2012. It had co-invested with ChrysCapital, which had brought in around Rs 97 crore separately. In early 2011, ChrysCapital invested Rs 112.5 crore for a 8.95% stake.

Founded in 1990, KPIT Technologies (earlier known as KPIT Cummins Infosystems Ltd) provides services including development, maintenance and support of software applications and risk management. The firm was created through a merger between KPIT Infosystems and Cummins Infotech. The company has about 10,800 employees in 34 offices in 16 countries. It reported revenue of $490 million in 2015-16.

Among other deals in the sector this year,  Bain Capital, GIC and Advent International invested $350 million to pick up minority stakes in global engineering solutions provider QuEST Global Services Pte from Warburg Pincus and other shareholders.

In April 2016, Shiv Nadar-founded HCL Technologies bought the IT services business of Mumbai-based Geometric for Rs 1,300 crore (around $200 million).

Shares of KPIT Technologies were trading 2.2% higher at Rs 130.30 apiece around noon in a flat Mumbai market on Thursday.

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