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Birlasoft and KPIT join hands

Published in Corporate Tuesday, 30 January 2018 15:02


Birlasoft, part of the USD 1.6 billion diversified CK Birla Group, and KPIT announced the coming together of Birlasoft and KPIT to create a USD 700+ million combined entity that will later demerge into two separate companies, focused on ‘Digital Business IT Services’ (Birlasoft) and ‘Automotive Engineering and Mobility Solutions’ (the new KPIT Technologies) respectively. During the period prior to completion of the deal, Birlasoft and KPIT will continue to be run by their current managements, in addition to which management from Birlasoft and KPIT will work together to familiarize Birlasoft with the ITSS business.
 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
•    Valuation Report: EY

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