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US company to pick up 8.5% stake in KPIT Cummins
By siliconindia staff writer
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Tuesday, 25 January 2005, 20:30 IST
MUMBAI: US-based investment bank Lehman Brothers will pick up an 8.5% stake in KPIT Cummins Infosystems Ltd for $8 million, sources close to the deal said.
Lehman Brothers will source its investments through its investment arm; LB I Group Inc. to pick up the stake. The acquisition price will be in the range of Rs 600 to Rs 650 per share. The company is planning to increase the FII limit from the current 24% limit to 49%.
Confirming the deal, KPIT Cummins general manager (finance) Anil Patwardhan said: "Lehman Brothers will pick up an 8.5% equity holding in our company for $8 million. We have been growing at 50% CAGR and these resources will be used to fund both organic and inorganic growth."
On the acquisitions front, KPIT Cummins is on the lookout for mid-sized companies for acquisitions and is looking to enter new geographies.
He said the acquisition of the US-based Panex last year for a consideration of $1.7 million was a good investment since the company has recorded a growth in revenues from $7 million at the time of acquisition to $14 million now.
KPIT Cummins is also planning to set up a new-wholly owned subsidiary for its BPO operations in transaction processing. KPIT Cummins has also recently started new risk-management practices with a team of 40 people in Pune.