Chennai: Leading construction firm Larsen & Toubro (L&T) said it would buy 20.32 per cent stake at Rs 980 per share in Mindtree for Rs 3,269 crore. It also made an open offer for an additional 31 per cent stake in the IT services firm for Rs 5,030 crore in an all-cash deal.
L&T, which is acquiring the 20.4 per cent shares from local coffee baron VG Siddhartha and firms related to him, said in a statement yesterday that it had also placed an order with its broker for an on-market purchase of up to 15 per cent of Mindtree’s shares at 980 rupees apiece. This will take L&T’s share to nearly 65 per cent, valuing the deal at Rs 10,733 crore.
L&T, whose board met during the day to consider the acquisition of Mindtree, offered to buy 5.13 crore shares from shareholders.
Mindtree will remain a separate entity and will benefit from access to larger client base and wider product offerings, the company said in the filing.
The company has entered into a definitive share purchase agreement (SPA) with VG Siddhartha and related entities, Coffee Day Trading and Coffee Day Enterprises, to acquire 20.32 per cent stake, L&T said in a release
The transaction is subject to regulatory approvals. L&T has sufficient financial flexibility to fund the entire transaction through its existing financial resources, the statement added.
This acquisition is in line with L&T’s stated strategy of focusing on services and asset-light businesses to drive profitable future growth. This further adds to L&T’s attractive IT services platform with a focus on new-age digital and cloud solutions, making it highly complementary to L&T’s current technology services portfolio.
Mindtree’s offerings to its customers include application development and maintenance, infrastructure management services, independent testing, package implementation, consulting and IP products related solutions.
While Mindtree would remain an independent listed entity, the statement said L&T would extend support to Mindtree in its business going forward. The Mindtree will benefit from access to larger client base and wider product offerings under a common parentage giving higher returns to shareholders of Mindtree, the statement added.