Global equity firm Warburg Pincus on Thursday said it would acquire 43 per cent equity stake in Tata Technologies from Tata Motors and Tata Capital for $360 million (Rs,2,325 crore).
"We will purchase 30 per cent equity from Tata Motors Ltd and its subsidiary Sheba Properties Ltd, and 13 per cent stake held by Tata Capital, including 8.7 per cent of Alpha TC Holdings Pte Ltd and 4.3 per cent of Tata Capital Growth Fund I," said Pincus in a statement here.
Post the transaction, Tata Motors and Tata Group affiliates will continue to retain 43 per cent in Tata Technologies, with the remaining 14 per cent stake held by the management team and other shareholders.
"The partial divestment is part of our plan to monetise the value created while inducting a valuable partner, together with whom we can excel in its next phase of growth," said Tata Motors Chief Financial Officer C.
Ramakrishnan in the statement.
As a global engineering services and product development IT firm with 8,500 techies in 23 countries worldwide, the Pune-based Tata Technologies is the industry's partner for advanced engineering, research and development, product lifecycle management consultancy and software, and connected enterprise IT solutions.
"With its service offerings and engineering capabilities, Tata Technologies has demonstrated the ability to scale accounts in a competitive industry by becoming embedded in the manufacturing and product development process of its customers," said Warburg Pincus India Managing Director Vishal Mahadeva in the statement.
Tata Technologies Chief Executive Warren Harris said the Warburg investment was a testament to his company's achievements and growth potential.
"As the engineering services outsourcing market has matured from cost arbitrage and staff augmentation to high-end, strategic work, we have leading the charge. With the perspective and insights of Warburg, we are confident of moving up the value chain and accelerate our growth journey," he said.
With $40 billion in private equity assets, the New York-based Warburg has invested in 140 global firms across sectors and geographies.
The five-decade-old firm has raised 16 private equity funds, which have invested $60 billion in 780 companies in 40 countries worldwide.
Affiliates of private equity funds raised by Warburg have invested $4 billion in 50 Indian companies.