R Systems International Limited , a global leader in digital product engineering, has announced a strategic acquisition that is set to reshape its position in the market. The company has entered into a definitive agreement to acquire 100% equity of Novigo Solutions, a specialist in low-code/no-code (LCNC) development and intelligent-automation services, for up to ₹400 crore.

Strategic Acquisition Details

The acquisition creates a formidable player in the digital product engineering services arena, with the combined entity boasting a revenue of ₹2,060.00 crore ($240 million) and an EBITDA of ₹380.00 crore ($45 million). The deal structure includes an upfront cash consideration of ₹400.00 crore, with an additional stock consideration linked to future EBITDA achievement.

Enhancing Capabilities and Market Reach

This strategic move is designed to significantly bolster R Systems' capabilities in several key areas:

• Product Engineering: The acquisition strengthens R Systems' digital product engineering services, particularly in the FinTech and Hi-Tech domains.
• Agentic AI: By integrating R Systems' OptimaAI Suite with Novigo's UiPath Diamond-tier automation practice and Microsoft Copilot Centre of Excellence, the combined entity is poised to lead in Agentic AI offerings.
• Market Expansion: The deal helps R Systems expand its presence in the fast-growing Middle East market and gain delivery capabilities in Bangalore and tier 2 cities like Mangalore.

Financial Highlights of Novigo

Novigo has demonstrated impressive financial performance:

• Revenue CAGR of 44% over the last three years
• 25% EBITDA margin
• Healthy free cash flow

Synergies and Growth Prospects

The acquisition is expected to be EPS accretive for R Systems from the first year. It offers significant revenue and cost synergies, including:

• Cross-selling opportunities in the Middle East
• Leveraging Novigo's low-code and automation capabilities for R Systems' global clients
• Cost advantages through delivery centers in tier 2 cities

Management Continuity

Novigo's management team, including CEO Praveen Kalbhavi and CTO Mohammed Hanif, will continue to be part of the combined platform, ensuring continuity and driving future growth.

Funding and Closure

R Systems plans to fund the upfront cash consideration through a combination of debt and internal accruals. The acquisition is expected to close in the coming weeks, subject to customary closing conditions.

Additional Corporate Actions

In a separate but related development, R Systems has also approved a private placement of rated, listed, unsecured, redeemable non-convertible debentures worth ₹275.00 crore. This move indicates the company's proactive approach to capital management and growth financing.

As R Systems International Limited embarks on this transformative journey, the acquisition of Novigo Solutions marks a significant milestone in its quest to become a leader in the evolving landscape of digital product engineering and Agentic AI. The strategic fit between the two companies, coupled with the potential for synergies and market expansion, positions R Systems for accelerated growth in the coming years.

R Systems International Limited has received a resounding approval from its equity shareholders and unsecured creditors for a composite scheme of amalgamation with Velotio Technologies Private Limited and Scaleworx Technologies Private Limited. The decision marks a significant step in the company's strategic growth plans.

Shareholder and Creditor Approval

The meetings, held on July 31, were conducted in accordance with the directions from the National Company Law Tribunal (NCLT), New Delhi Bench. The voting results demonstrated overwhelming support for the merger:

• Equity Shareholders: 99.99% of votes cast were in favor of the amalgamation.
• Unsecured Creditors: 99.99% of votes (excluding promoter group) approved the scheme.

Voting Participation

The shareholder participation was notably high:

This strong turnout underscores the significance of the merger for R Systems International's stakeholders.

Scrutinizer's Confirmation

The scrutinizer's reports confirmed that the special resolution achieved the requisite majority, validating the amalgamation process.

Corporate Governance and Transparency

R Systems International Limited has demonstrated its commitment to corporate governance by promptly disclosing the voting results and scrutinizer's reports. The company made this information available on its website and through MUFG Intime India Private Limited's portal.

Looking Ahead

The approved merger with Velotio Technologies Private Limited and Scaleworx Technologies Private Limited is expected to strengthen R Systems International's market position in the IT services sector. While the specific strategic benefits of the amalgamation were not detailed in the disclosure, such mergers often aim to enhance capabilities, expand service offerings, or improve operational efficiencies.

Investors and industry observers will likely be watching closely to see how this amalgamation impacts R Systems International's future growth and competitive stance in the market.

As the merger progresses, stakeholders can expect further updates from R Systems International Limited regarding the integration process and its impact on the company's operations and financial performance.