Company to watch: Flextronics software/India
Kohlberg Kravis Roberts, a leading private equity firm, is acquiring the software business of Flextronics International for about $900 million in India’s largest-ever leveraged buyout. Flextronics Software Systems, as the business is known, specializes in communications technology for mobile multimedia, such as television reception on cell phones, and services for wireless networks. Flextronics, its Singapore-based parent, will retain a 15% equity stake in the business. Formerly Hughes Software Systems, the Indian company was founded in 1991 as an offshore software-development unit of US-based Hughes Electronics with 20 employees in New Delhi. It now has 6,100 employees worldwide, including operations in the US and a significant presence in Eastern Europe, with an affiliated company in Ukraine.
Flextronics Software Systems will operate under a new name, which has yet to be selected. The existing management team will remain in place. “As a standalone business, we will be better positioned to further develop our service and product offerings and expand our customer relationships,” says Ash Bhardwaj, CEO of the software business. KKR will finance the acquisition with debt. Citigroup and Merrill Lynch are joint lead arrangers for the acquisition financing.