KPIT Cummins buys 50% in Systime for Rs 103 crore

KPIT Cummins Infosystems said it has bought a 50% stake in Systime, a business technology service provider, for Rs 103 crore, to expand its Oracle-based consulting and services business.

The Pune-based IT firm said it will buy the remaining 50% of equity and preference shares over three years.

"From KPIT's perspective, the deal gives us a presence in Brazil and a much larger presence in the Oracle world, especially in the manufacturing and the energy and utilities vertical," Chief Executive Kishor Patil told reporters on a conference call.

Mumbai-based Systime has presence in 77 countries, including Brazil, which accounts for about 10% of the firm's revenue.

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Systime, a unit of the CMS group, provides Oracle's JD Edwards enterprise solution to its clients. Oracle's JD Edwards solution is a suite of enterprise resource planning software that provides ease in administration and saves costs.

After the deal, the combined Oracle practice of the company will be worth more than USD 125 million for FY12, KPIT said in a statement.

In Januaruy, Anil Patwardhan, vice-president of finance at KPIT, had told Reuters the company is scouting for acquisitions of about USD 20 million to USD 25 million in the areas of automotive electronics and enterprise resource planning.

The company had acquired US-based CPG Solutions and Germany-based In2Soft Gmbh in FY11. The deal, which was funded via internal accruals, will start adding to KPIT's revenue from October and will contribute USD 68 million in the first year, Patil said.

Avendus Capital were the advisors on this transaction, KPIT said.

Shares of KPIT, which the market values at USD 376.94 million, rose as much as 5%, but pared its gains to close flat at Rs 163.70 in a firm Mumbai market.