Blackstone Commits to Invest Rs 2904 Cr to Acquire a Majority Stake in R Systems

Blackstone announced that private equity funds managed by Blackstone (“Blackstone”) have signed definitive agreements with Satinder Singh Rekhi and other current promoters to purchase a majority stake in R Systems International Limited (“R Systems”). 

R Systems, founded in 1993 by Satinder Singh Rekhi, is one of the leading providers of digital Information Technology services, specializing in product engineering, and serves over 250 customers in technology, media, telecom, and financial services sectors globally. R Systems is a partner of choice for enterprise customers with a strong suite of capabilities in product engineering, artificial intelligence, data analytics, internet of things, robotic process automation and cloud, employing over 4,400 people across 18 delivery centers in North America, Europe, Asia Pacific, and India. R System’s revenue for the last twelve months, as of September 30, 2022, was INR 1,445 crore (~$189 mm), registering a 36% year on year growth. 

Satinder Singh Rekhi and the other promoters currently hold ~52% stake in R Systems, which Blackstone will acquire for INR 245 per share. Blackstone will also launch a conditional delisting offer, at a price of INR 246 per share. The transaction is expected to be completed in the coming months, subject to customary closing conditions and regulatory approvals. Dr. Rekhi will continue to guide the company in his role as a non-executive advisor.  

Mukesh Mehta, Senior Managing Director at Blackstone, said: “R Systems has been a reliable long-term partner to marquee global customers, guiding them on their digital transformation journeys. Their domain knowledge, service quality and global delivery centers make them a partner of choice for their customers. As a leader in outsourced software product development, R Systems is well-positioned to benefit from digitalization tailwinds, shorter product launch cycles and increased openness to outsource product development. This investment follows Blackstone’s long-standing conviction in IT services and builds on the firm’s robust track record in the sector globally. We are excited to partner with the current management team to support the company’s next phase of growth, both organically and through strategic acquisitions. I am aware of the great work that Dr. Rekhi has done in the field of the science of Happiness, and the Blackstone team is looking forward to working with him.”  

Satinder Singh Rekhi, CEO of R Systems, said: “I am excited that our partnership with Blackstone will take R Systems on the path to its next level of growth. Today, R Systems is a well-known product engineering brand that attracts top-notch talent looking to work on cutting-edge solutions for our global clients. The company’s management team will be excited to welcome Blackstone and benefit from their scale, expertise, and global track record in IT services. Our employees, customers, and partners will gain immensely from this partnership with Blackstone. I am happy for my new role as an advisor to the company under Blackstone’s ownership.” 

BDA Partners acted as the financial advisor to the sellers of R Systems. AZB & Partners acted as legal advisor to the sellers. KPMG, Cyril Amarchand Mangaldas and Simpson Thacher & Bartlett acted as advisors to Blackstone.