Private Equity Invests in IT Services: Deal Valuation, Background
A Blackstone private equity fund will pay $359 million for the 52% majority ownership stake in R Systems, Reuters reported. Quick math suggests the overall business valuation is therefore $690 million.
R Systems, founded in 1993, is based in Noida, India. The company serves over 250 customers in technology, media, telecom, and financial services sectors globally. R Systems employs 4,400 people across 18 delivery centers in North America, Europe, Asia Pacific, and India. The company’s 12-month trailing revenues, as of September 30, 2022, was roughly $189 million — up 36% ear over year.
R Systems has grown both organically and through acquisitions. Indeed, the IT services firm has acquired at least 10 businesses since inception.
Blackstone Investment in R Systems: Executive Perspectives
In a prepared statement about the deal, 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.”
Added Satinder Singh Rekhi, CEO of R Systems::
“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.”