Promoters of Ahmedabad-based Crest Data Systems are looking to sell a 25-30% stake in the data analytics and cyber security company to private equity funds, said three people with knowledge of the development.
The promoters have approached Carlyle Group, Kedaara, General Atlantic and KKR for the secondary share sale, these people said, with one of them adding that Crest Data is being valued at $500 million-$600 million for the deal.
“It is early days. The funds have just started engaging with the promoters,” a second person said, adding that the promoters have appointed Kotak Mahindra Capital to find buyers.
Negotiations are expected to progress to the next stage as early as January, another person said, adding, “It is going to be a minority stake sale. It is largely a secondary deal.”
A legal spokesperson for Crest Data denied that the promoters had initiated deal talks for a secondary stake sale. “We are not in any discussion to raise funds and this is baseless information,” the spokesperson said. “We deny the information… in entirety.”
Spokespersons for Kotak Mahindra, General Atlantic, KKR, Carlyle India and Kedaara did not immediately reply to queries on the deal talks.
Founded in 2013 by husband-wife duo Malhar Shah and Neha Shah, Crest Data Systems provides data centre solutions as well as engineering and marketing services in the areas of networking, storage, security, cloud computing, analytics, and big data.
The promoters and their family hold a 100% stake in the company. If the secondary sale goes through, it will be Crest Data’s first institutional fundraise.
“The company is profitable and hence not looking at raising any primary capital,” the first person cited above said.
Crest Data also provides various engineering services including software development, quality assurance, automation, third-party integration, and building connectors, as well as professional services such as data-centre training, network design, implementation, migration, and sales enablement.
Crest Data counts Google, LinkedIn, Cisco, Dell and Symantec among its marquee clients. Its main competitors include ASGN, Carahsoft, Kaseya, and Salient CRGT.
Crest’s revenue improved to Rs474.93 crore in FY2023 from Rs307.93 crore in the year prior, helping lift its profit to Rs210.04 crore from Rs109.98 crore, according to data sourced from research platform Tracxn.
India’s data analytics industry is expected to reach $118.7 billion by 2026, per a 2022 report by India Brand Equity Foundation, driven by the government’s push towards digitisation and the establishment of new data centres.
The sector is projected to create over 11 million jobs by 2026, and expected to play a crucial role in Industry 4.0, the report said, in a reference to digital transformation in manufacturing and industrial processes.
India’s data analytics industry is growing at a steady pace and will prove disruptive, resulting in a paradigm shift, India Brand Equity Foundation said in its report.
