Focus on asset light businesses
Larsen & Toubro Limited (NSE: LT, BSE: 500510), has entered into a definitive Share Purchase Agreement (SPA) to acquire 20.32% stake in Mindtree, a global technology services and digital transformation company.
The SPA was signed with V G Siddhartha and his related entities namely, Coffee Day Trading Limited & Coffee Day Enterprises Limited,
L&T will purchase this stake at a price of Rs.980 per share, aggregating to approximately Rs.32.69 billion, said the company in a release on 18 Mar 2019.
The acquisition is in line with L&T’s stated strategy of focusing on services and asset light businesses to drive profitable future growth.
This further adds to L&T’s attractive ITservices platform with a focus on new-age digital/cloud solutions, making it highly complementary to L&T’s current technology services portfolio.
Mindtree’s offerings to its customers include application development & maintenance, infrastructure management services, independent testing, package implementation, consulting and IP products related solutions.
While Mindtree would remain an independent listed entity, L&T would extend support to Mindtree in its business going forward.
Mindtree will benefit from access to larger client base and wider product offerings under a common parentage giving higher returns to shareholders of Mindtree.
Commenting on the occasion S N Subrahmanyan, L&T CEO & Managing Director said: “This acquisition is part of our strategy to deliver industry leading IT services to our clients worldwide. It will help propel L&T’s technology portfolio into top tier of Indian IT companies.”
Mindtree has a well-established management team which has earned the respect of the market in terms of its service offerings and business practices, he noted.
The acquisition will allow L&T to further enhance shareholder value for both its own shareholders and Mindtree shareholders in the medium to long term, he assured.
KPMG Corporate Finance is the lead advisor for the transaction. Axis Capital Limited – lead financial advisor and Citigroup Global Markets are acting as financial advisors to L&T.
AZB & Partners and Baker & McKenzie LLP are acting as legal advisors to L&T. fiinews.com
