Investment banking giant Goldman Sachs and private equity firm Everstone Group have jointly agreed to acquire a “significant stake” in California-based digital engineering services company Infostretch Corp.
Infostretch said in a statement on Tuesday the investment from Goldman Sachs’ merchant banking division, which includes its PE business, and Everstone can help it benefit from their business relationships, capabilities of their operating partners and their merger & acquisition (M&A) experience as it looks to grow its operations.
The company said it plans to be actively look for M&A opportunities to strengthen its capabilities in the digital stack.
Infostretch didn’t disclose the amount it is raising or the size of the stake it is selling.
The company works across the entire software development lifecycle, from strategy through execution and operations, and helps companies overcome technical obstacles in their digital efforts. It has over 1,200 engineers and offers core capabilities in cloud, data, Internet of Things, mobile and analytics.
“Digital will be the core differentiator for businesses of all sizes in almost every segment over the next five to 10 years,” said Avnish Mehra, senior managing director at Everstone, explaining the rationale for the deal.
Mehra added said that Infostretch had expertise in emerging technologies and the ability to incorporate intelligent automation across the development lifecycle.
Harsh Nanda, a managing director in Goldman Sachs’ merchant banking division, said Infostrech had capabilities in areas like artificial intelligence and analytics as well as a clients across healthcare, financial services and high-tech industries.
“We saw an opportunity to invest in a company that has demonstrated an ability to help organizations clearly distinguish themselves via the latest digital technologies,” Nanda added.
Rutesh Shah, CEO and co-founder of Infostretch, said the investment would help the company with its “aggressive” expansion plan.
“This investment will enable us to build on those strengths and take advantage of the growing need for more innovative digital solutions in verticals like healthcare, financial services and technology,” Shah said.
Everstone is an active PE and infrastructure investor. In private equity, it has been investing from its third fund. Last month, its renewable energy fund roped in a new Limited Partner.
Everstone, which has more than $3.5 billion in assets under management, has investments across consumer, healthcare, financial services and IT services sectors. Its portfolio includes companies such as Burger King India, Omniactive Technologies, Ascent Health, Sahyadri Hospitals and BPO platform Everise Services.
Goldman Sachs has invested in Indian companies such as Purplle.com, Livspace, Cytecare Hospitals, ReNew Power, Tejas Networks and BPL Medical. It has also, via its asset management division, co-invested in Tikona Digital Networks alongside Everstone.