The Blackstone Group is partnering with India's CMS Group to set up a new company formed out of the IT infrastructure management and outsourced business services divisions (comprising card solutions, transaction printing solutions and ATM cash management) of CMS Computers.

Blackstone will have a majority stake in the new company and majority board representation, while the Grover family will retail a substantial minority stake. Rajiv Kaul, former chief executive of Microsoft India, will become its executive vice-chairman and chief executive.

Founded in 1976, CMS Computers is a business and technology solutions provider with more than 15,000 professionals worldwide. Its IT services business in India offers a wide range of solutions and services in strategic IT consulting, networking, training, outsourcing, facility management, customising and implementing solutions, on-site service and support, and application management support.

Following the establishment of the new company, the Grover family will continue to manage the remaining businesses within the CMS Group, comprising its global software solutions unit Systime, CMS e-Governance, CMS Traffic Systems, and access, security, energy and broadcast systems.

'We realised that an enhanced level of corporate governance through professional management together with private equity participation was critical to take CMS to the next level,' says group chairman Ramesh Grover.

'Blackstone has an impeccable record of partnering with companies and supporting their growth. We are confident that Blackstone's involvement coupled with Rajiv's vision and leadership will strengthen the new company across its businesses and build on its current position.'

Akhil Gupta, chairman and senior managing director of Blackstone Advisors India, says: 'We are enthusiastic about this investment as we believe CMS is a market leader and is well positioned to capitalise on the growth opportunity in the IT infrastructure and outsourcing services market in India. Rajiv brings a wealth of experience to lead CMS in the next phase of growth.'

Kaul was most recently a London-based partner with Actis Capital active in the technology sector, following more than 10 years with Microsoft Corporation. He joined Microsoft India in 1996 and five years later become one of the company's youngest country managers. His last assignment at Microsoft was as a senior director for emerging markets based in Redmond.

'I have always been excited about the opportunity the Indian domestic market offers for outsourcing business services and end-to-end IT solutions and services,' he says. 'With its strong customer base and geographic reach across 500 locations, CMS provides the ideal platform, in partnership with Blackstone, to capitalise on its leadership position.'

The Blackstone Group's businesses include the management of corporate private equity funds, real estate funds, hedge funds, funds of funds, debt funds, collateralised loan obligation vehicles and closed-ended mutual funds, as well as financial advisory services including mergers and acquisitions advisory, restructuring and reorganisation advisory and fund placement.