PE giant Warburg Pincus to pick up 43% in Tata Tech for $360 million
Global private equity firm Warburg Pincus will collect a 43% stake in Tata Technologies for USD 360 million in an agreement that will see Tata Motors’ partial exit in engineering outsourcing.
The deal will also see Tata Capital completely out of the company by selling its stake up to 13 percent owned by Tata Growth Fund and Alpha TC Holdings, while Tata Motors will sell 30 percent to hold it at 43 percent , Identical to the new inverter.
The agreement came after the Tata group decided to reduce investments in the group so that these companies can focus more on their core activities and unlock value for shareholders. According to reports, several companies in the group hold shares of several tens of billions of rupees to each other and that was one of the charges that deposed president Cyrus Mistry had made against the management of Tata Sons.
Several companies in the group reportedly have shares worth tens of billions of rupees in each other and that was one of the charges that deposed president Cyrus Mistry had made against the management of Tata Sons.
Tata Technologies is a global engineering and product development company, which employs more than 8,500 people in 23 countries. It provides advanced engineering services, R & D and connected IT solutions.
The company achieved a turnover of $ 423 million during fiscal year 2017 and aims for a growth of 16-20 percent over the next three years, PTI CEO and CEO Warren Harris told PTI.
Its tax before taxes amounted to $ 73 million last year, while net income was $ 53 million, he said.
Harris declined to register for the project, claiming that Warburg usually invests in a five to seven year old business. However, he said that Warburg’s stake will be more than a financial investor, saying it will guide the company in its next phase of growth through its two positions on the board.
However, he said that Warburg’s stake will be more than a financial investor, saying it will guide the company in its next phase of growth through its two positions on the board.
“Partial divestment is part of Tata Motors plans to strategically gain economic benefits a share of the value created, while inducing a valuable partner, with which the company can excel in its next phase of growth,” said the financial director of the subsidiary Tata Motors, C Ramakrishnan. .
Harris said the deal should be approved by the Competition Commission, which will have about two months.
The company is currently increasing Tata group revenue not more than the current 50 percent, and the contribution of relocation or work in the country beyond the current 27 percent.
At present, the automobile industry accounts for 70 percent of its revenue, followed by approximately 12 percent of industry and machinery and 9 percent of the aerospace sector.
Harris said the company also intended to offer defense projects. He was considering other acquisitions, he said, adding that such an agreement was sealed earlier this year.
Following the transaction, Tata Motors and its affiliates continue to hold a 43% stake in Tata Technologies, the property retained by the management team and other shareholders.
The General Manager and CEO of Warburg Pincus India, Vishal Mahadevia, said that the company is waiting for a return to the management team of Tata Technologies and will build on the global network Warburg Pincus to promote the company’s growth.
Tata Motors system reached 0.70 percent to close at 448.45 Rs on BSE against a correction of 0.26% in the benchmark Sensex. The deal was announced after the market time.