Tanla Solutions Ltd has agreed to acquire enterprise mobile engagement platform Karix Mobile Pvt. Ltd in a cash-and-stock deal that will result in private equity firm Blackstone getting a stake in the cloud communications company.
Hyderabad-based Tanla Solutions said on Monday it will acquire Karix, formerly known as mGage India Pvt. Ltd, and its wholly owned subsidiary Unicel from GSO Capital Partners, the credit arm of Blackstone, at an enterprise value of Rs 340 crore ($48.7 million).
The deal comes eight eight months VCCircle reported in January that mGage was looking for a buyer.
Under the terms of the deal, Tanla will take over Karix's debt of Rs 103 crore and will pay GSO Rs 112 crore in cash. Tanla will also issue shares worth Rs 125 crore at Rs 56.79 apiece to GSO. This will result in GSO getting a 14.6% stake in Mumbai-listed Tanla. GSO will also get an observer seat on Tanla’s board.
Tanla promoters will own 30.6% of the combined company, employees 5.6% and public shareholders 49.2% on completion of the acquisition.
Tanla chairman and managing director Uday Reddy said Karix is “an ideal strategic fit” for the company and will held expand the cloud communications business with its high-value customer base.
Karix Mobile an 18-year-old brand, has offices in four major Indian cities with over 1,500 enterprise clients globally. It recorded revenue of Rs 540.24 crore in 2017-18.
“The combined strength of Karix and Tanla will afford our enterprise customers a single source for a comprehensive suite of communications services, and an assurance that their future emerging requirements will be met timely,” said Jay Sheth, CEO at Karix.
After the acquisition, Tanla will emerge as a leading cloud communications company in India with combined revenue of Rs 1,170 crore in 2017-18. It expects cost synergies of about Rs 15 crore, over the next six quarters of operations.
The acquisition is likely to close by October and is subject to approval from Tanla’s shareholders and regulators.