Structuring key to Birlasoft, KPIT deal

Birlasoft, a digital business IT services company owned by the CK Birla Group, has joined forces with KPIT Technologies, which focuses on IT consulting and product engineering.

The “unprecedented transaction” involved “a merger, de-merger, a listing, multiple open offers by different acquirers for different companies at different points of time, and complex option arrangements”, said Ashwath Rau, a partner at AZB & Partners, which advised KPIT.

“The intent of the parties was for Birlasoft to become promoters of KPIT (along with other KPIT promoters), combine Birlasoft’s business with KPIT, and then create two separate companies [following the de-merger of KPIT’s engineering business],” explained Rau.

“Given various commercial objectives of the parties and KPIT being a listed entity, the deal involved complex structuring issues and documents within the contours of the SEBI [Securities and Exchange Board of India] regulations, to achieve the objective.”