New Delhi, Dec 29: IT firm 3i Infotech Ltd on Monday said it has entered into definitive agreements to sell its software products business to the funds advised by Apax Partners for Rs 1,000 crore.

The software products business will be acquired by a newly formed company named Azentio Software, wholly-owned by the Apax Funds, a statement said. The transaction, subject to shareholder approval and relevant regulatory approvals, is expected to close in early 2021, it added.

"Following the transaction, 3i Infotech will continue to pursue strategic growth initiatives in the IT services business, supported by a stronger balance sheet.

"The transaction will revitalise growth and accelerate value creation for all stakeholders of 3i Infotech, including customers, employees and shareholders," the statement said.

The newly formed Azentio Software will be supported by Apax Funds, with increased investments in R&D and sales and marketing, it added.

Azentio Software will focus on investing in its current product portfolio, launching new products and providing best in class service levels to all customers. The Apax Funds will also use Azentio as a platform to do M&A across the BFSI software space in the region, the statement said.

Since its incorporation in 1993, 3i Infotech has been providing a range of IT services and software products to over 1,200 customers across multiple industry verticals in over 50 countries. The company operates through two business segments: Services and Software Products.

The Services segment, under the brand 'Altiray' provides consulting services, business optimisation services and an extensive expertise in mobility, data analytics, big data, testing and application development.

The Software Products business comprises a comprehensive set of core software products for customers in banking, financial services and insurance (BFSI) verticals and includes key products such as Kastle (universal banking platform), AMLOCK (financial crime detection and compliance software suite), Premia Astra (core insurance software), MFund Plus (asset management platform) and Orion (enterprise resource planning software).

"Today's announcement is transformative and value accretive for all stakeholders of 3i Infotech. I foresee a very exciting future for both the IT services and the software products business.

"Both businesses will have the resources to capitalise on market opportunities and build long term value for employees, customers and shareholders," 3i Infotech Managing Director and Global CEO Padmanabhan Iyer said.

Shashank Singh, Partner and Head of the India office at Apax Partners, said increasing technology spend on core software systems across the BFSI industry and ERP space is driving rapid growth in the enterprise software market in the region.

"The newly formed company, Azentio, has a strong portfolio of feature rich products that run the core operations for customers. We are excited to unlock Azentio's potential and help transform the business into a true regional leader in the software space," he added.

As per a regulatory filing, the turnover/revenue of the Product Division is Rs 442.98 crore for year ending March 31, 2020, which constitutes 38.81 per cent of the company's consolidated turnover/revenue for the fiscal.

Net worth of Product Division was Rs 323.03 crores as on March 31, 2020.

The rationale for the slump sale, according to the filing, was to facilitate repayment of all existing debt exposure of the company; to scale up other existing business segments of the company, including providing IT services to customers across sectors and geographies; and to unlock value by sale of an undertaking of the company and strengthening the balance sheet of the company.

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