KPIT, Birlasoft Join Hands To Form Two Entities

by CXOtoday News Desk    Jan 30, 2018

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KPIT Technologies had informed the exchanges that its board had approved a draft composite scheme for amalgamation of Birlasoft (India) with KPIT. The second leg of the transaction would involve demerger of the engineering business of the company into KPIT Engineering Limited (KEL), a wholly owned subsidiary of the company and will be renamed as KPIT Technologies Limited.According to arrangement, shareholders of Birlasoft will receive 22 equity shares of the combined KPIT-Birlasoft for every nine equity shares of Birlasoft. the combined KPIT-Birlasoft will be engaged in the ITSS Business, and pursuant to the Proposed Demerger, KEL’s shares will be listed and shareholders of combined KPIT-Birlasoft will receive one share of KEL for each share they hold in the combined KPIT-Birlasoft.

Once the deal closes, At the conclusion of the deal, two new companies will be created. The new KPIT Technologies will be a USD 200+ million focused Engineering Services company that will be created by tapping into the current Engineering business of KPIT to create a global leader in Automotive Engineering and Mobility Solutions.

The new ‘Birlasoft’ will be a USD 500+ million Digital Business IT Services company that will be created by combining the KPIT ITSS business and the current Birlasoft creating a new leader in the mid-tier IT services space, which will also be called Birlasoft.

Ravi Pandit, Chairman of KPIT, added that “The tremendous value created by KPIT over the last 27 years will continue in two new avatars and become leading companies in their respective spaces. Over the years, we have gained reputation as one of the global leaders in Automotive Embedded Software. We will be focused on building the KPIT brand as the foremost organization in the world for Automotive Engineering and Mobility Solutions. The world of Automotive and Mobility are at the cusp of great change and we are excited to be at the technology forefront in this global movement. While transitioning the “Business IT Services” business to Birlasoft in the next year, our team will continue to work with Birlasoft to ensure the best service to the KPIT Business IT customers.”

Commenting on the partnership, Amita Birla, Chairman of Birlasoft said “Digital solutions are today not confined to the periphery of business but are transforming the very core of business processes. The digital age requires each organization to re-invent itself to address and lead the disruption and opportunities it brings. With this, Birlasoft will expand its industry leading capability in Enterprise solutions with unmatched digital capability. We will become the leading ‘Enterprise Digital’ company in the country that will advise its customers in unlocking value in their digital journey.”

The new KPIT Technologies will leverage KPIT’s expertise in Automotive and Mobility, and will be led by Kishor Patil as the CEO and MD. This company will deepen the relationship with global Automotive and Mobility leaders in fulfilling their engineering needs. KPIT will continue to enhance its expertise in all the features to deliver cleaner, safer and smarter solutions to the world of Automotive and Mobility.

The new ‘Birlasoft’, that will emerge over the next year, will combine the management team and the IT Services business of KPIT with the current Birlasoft. It will be led by Anjan Lahiri as the CEO and MD. The company will have the highest percentage of business coming from core enterprise systems vis-à-vis any other competitor, unique, industry leading capabilities from the Enterprise Product and Cloud companies: SAP, Oracle, JDE and Salesforce.com. The company will have the highest level of partnership with SAP, Oracle as well as with Salesforce, a position unmatched by any other similar company, said the release.

It added that the entity will have significant ‘Digital’ capability in Analytics, RPA (Robotic Process Automation), Digital Portals, User Experience and Digital advisory services and a strong presence in Application Development, Support and Maintenance for Next Generation Services in the digital world.