Warburg Pincus eyes 43% stake in Tata Technologies

Private equity firm Warburg Pincus has decided to acquire approximately 43% in Tata Technologies for around $360 million.
 
Warburg Pincus will purchase approximately 30% from Tata Motors and its subsidiary Sheba Properties, as well as the entire 13% stake held by Tata Capital (8.7% from Alpha TC Holdings and 4.3% from Tata Capital Growth Fund I). Post the transaction, Tata Motors and affiliates of the Tata Group will continue to retain a significant minority interest of approximately 43% in Tata Technologies, with the remaining ownership held by the management team and other shareholders, a release said.
 
Tata Technologies is a global engineering services and product development IT company with more than 8,500 employees located in 23 countries. The company has recently delivered multiple fully outsourced vehicle programs for automotive clients, a capability that is unique amongst India-based engineering services companies. The Tata Technologies services portfolio combines engineering, research and development (ER&D); product lifecycle management (PLM) and connected enterprise IT (CEIT) solutions.
 
Citigroup Global Markets India acted as the sole financial advisor to Tata Motors and Tata Capital Investment Banking acted as the sole financial advisor to Tata Capital. The transaction is subject to customary regulatory approvals, the release added.
 
"The partial divestment is part of Tata Motors' plan to strategically monetize part of the value created while also inducting a valuable partner, together with whom the company can excel in its next phase of growth. We look forward to partnering with Warburg Pincus and achieving greater heights for the Company and all its stakeholders," Tata Motors group chief financial officer C Ramakrishnan said.
 
"We are delighted to be partnering with the Tata Group to support the continued growth and development of the Company.  We look forward to backing the strong management team at Tata Technologies and leveraging Warburg Pincus' global network and prior experience in the engineering services space to help grow the business, organically and inorganically, and create value for all stakeholders," Warburg Pincus India managing director and co-head Vishal Mahadevia said.