KKR Acquires 85% In Flextronics Software For $900 Million In India's Largest Leveraged Buyout Deal

The world's leading buyout fund Kohlberg Kravis Roberts & Co (KKR) has acquired India's Flextronics Software Systems (formerly Hughes Software) for $900 million. Flextronics International, which owns FSS will retain a 15 per cent equity stake in the company, while the rest 85 per cent will be acquired by KKR in a leveraged buyout. Following completion of the transaction, CEO Ash Bhardwaj, FSS President Arun Kumar, and the existing management team will continue to lead the software business. It will operate under a new name, which has yet to be decided. The acquisition is KKR's first investment in India and second investment in Asia, following its 2005 investment in Avago Technologies, the former Semiconductor Products Group of Agilent Technologies. It is also believed to be the largest leveraged buyout and technology investment in India to date.

The deal is also significant as KKR hired Michael Marks, the CEO of chip maker Flextronics, to advise on Asia and technology investments. Flextronics had acquired 55 per cent in Hughes Software (now known as FSS) in June 2004 for $226 million. After that, it delisted Hughes from the stock market.