Kohlberg Co acquires Flextronics for $900 mn | india | Hindustan Times
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Kohlberg Co acquires Flextronics for $900 mn

One of the first leveraged buyouts, the acquired company will be focusing on organic growth and go for niche acquisitions.

india Updated: Oct 26, 2006 20:05 IST

After completing the acquisition of Flextronics Software Solutions, private equity firm Kohlberg Kravis Roberts & Co (KKR) has changed the name of the company to Aricent Communications Software.

Announcing the new brand in New Delhi on Thursday, Ash Bhardwaj, Aricent's chief executive, said his firm aimed to become a billion dollar sales company by 2010-11.

In the current financial year, the company is expected to post revenues of $300 million with a profit margin of over 25 per cent.

The acquisition was one of the first leveraged buyouts in the country. KKR acquired Flextronics for around $900 million, of which $300 million was brought in as equity, and the remainder as debt to be repaid by the Indian company over the next 10 years or before.

KKR is the largest shareholder in the company with a 70 per cent equity stake, while Flextronics International Ltd owns 15 per cent. Another 10 per cent is owned by venture capital fund Sequoia Capital and the remaining five per cent is held by employees.

“Eventually the company will do a float (go public) but the timing has not been decided. Once Aricent achieves the critical mass like revenues of $500 million, most likely by 2008, then we will evaluate the situation," Bhardwaj said.

Company officials said they focused on organic growth but were open to niche acquisitions.