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INDIA BUSINESS WORLD - November 16th December 31st 2008
PRIVATE EQUITY FIRM BLACKSTONE ACQUIRES DOMESTIC IT BIZ OF CMS COMPUTERS
PRIVATE equity firm Blackstone has picked up a majority stake in a venture consisting of the domestic IT business of CMS Computers and its card printing, printing solutions and ATM cash management business. CMS Computers will continue to hold a minority stake in the entity that will headed by former Microsoft India CEO Rajiv Kaul.
The other businesses of the CMS group—IT exports, e-governance, traffic systems, access, security, energy and broadcast systems—will continue to be within its fold. The domestic IT business, which is part of the new entity majority-owned by Blackstone, will have the training, distribution and systems integration business. “For us, the interest level was determined by a few factors—scale was important as was the Indian market focus,” said Mr Kaul, who joins as executive vice-chairman and CEO. The domestic IT and outsourced business services, although seemingly disparate, have synergies in that they sell to similar customers such as banks and telecom players, he added.
The value of the transaction and Blackstone’s stake in the new entity was not disclosed. Industry sources, however, pegged it around Rs 250 crore. Talks for the sale of these businesses have been going on from before the market environment worsened significantly after the fall of some of the global financial majors.
CMS, which has been in business since 1976, has long-standing clients of 20-25 years and ranks among the top five players in the domestic market. It has a presence in around 130 locations across the country. Mr Kaul, who was last a partner with PE firm Actis, said the goal was to make it one of the top three firms in the domestic market.
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