Private Equity

Liquidity Events

Ascent Capital & Kalaari-backed Robosoft acquired by Japan's TechnoPro for Rs.800-Cr

Target Co. Release   Acquirer Announcements; Advisor Release  

Tokyo Stock Exchange listed TechnoPro Holdings, Inc. is to acquire a 100% stake in Udipi, KA-based IT Services firm Robosoft Technologies Private Limited. The INR 800 crore deal will be completed in two phases: 80% in the first tranche and remaining 20% approximately one year later. PE-VC investors Ascent Capital held a 37.3% and Kalaari Capital 27.0% in the company. 15 individuals including promoters and executives of Robosoft held the balance 35.7%. GCA acted as exclusive Financial Advisor to Robosoft and its shareholders. Indus Law and Anoma Legal acted as Legal Advisors and KPMG, Deloitte and PwC acted as Due Diligence and Transaction Tax advisors respectively. Robosoft will continue to be led by its current management team, headed by Chief Executive Officer, Ravi Teja Bommireddipalli who is also being elevated to Managing Director and CEO. The acquirer aims to use Robosoft as an offshore hub for delivery of digital solutions to clients in developed countries. Robosoft employs more than 800 engineers providing solutions such as digital advisory, UI/UX design, engineering services, analytics, middle/back-end development to customers located in USA and Europe, Japan and India. The target company has reportedly accelerated its growth during the last three years by gaining major accounts in the US and Japan, and realized a revenue growth of over 89% YoY and a EBITDA growth of over 165% with an EBITDA margin of 40% in the latest fiscal year. It has offices in the US and Japan with revenues from customers in these regions accounting for about 45% and 24% of its total respectively. Robosoft had reported INR 184 Cr in Net Sales for FY21, as compared to INR 97.4 Cr and INR 75 Cr in the previous two fiscals. Its EBITDA for the last three fiscal years were INR 73.6 Cr, INR 27.8 Cr and INR 13.9 Cr respectively. Venture Intelligence Note: It is estimated that the Robosoft exit fetches Ascent Capital a 14x multiple on its investment. (The latest exit quickly follows Ascent's exit from e-grocer BigBasket with a 26x return.) The TechnoPro acquisition does not include the 99games unit that was spunout from Robosoft in 2015 again with investments from Ascent and Kalaari (followed by another round, including from Dream Incubator, in 2016). Robosoft will continue to be led by its current management team, headed by Chief Executive Officer, Ravi Teja Bommireddipalli who is also being elevated to Managing Director and CEO. The acquirer aims to use Robosoft as an offshore hub for delivery of digital solutions to clients in developed countries. Robosoft employs more than 800 engineers providing solutions such as digital advisory, UI/UX design, engineering services, analytics, middle/back-end development to customers located in USA and Europe, Japan and India. The target company has reportedly accelerated its growth during the last three years by gaining major accounts in the US and Japan, and realized a revenue growth of over 89% YoY and a EBITDA growth of over 165% with an EBITDA margin of 40% in the latest fiscal year. It has offices in the US and Japan with revenues from customers in these regions accounting for about 45% and 24% of its total respectively. Robosoft had reported INR 184 Cr in Net Sales for FY21, as compared to INR 97.4 Cr and INR 75 Cr in the previous two fiscals. Its EBITDA for the last three fiscal years were INR 73.6 Cr, INR 27.8 Cr and INR 13.9 Cr respectively.

From the Venture Intelligence PE-VC Deal Database: Between Jun-13 and Apr-15, Robosoft had raised over INR 86 Cr from Ascent Capital and Kalaari Capital. (Subscribers to the database can login to view the valuation, deal structuring and other transaction details of the investments in Robosoft and 99games.)