Advent International closes in on BT’s Tech Mahindra stake
Advent International is intensifying negotiations with BT over the UK telecom group’s stake in Tech Mahindra. BT held a 23.37% interest in the Indian IT company as of June 30 and has been looking at exit options. Based on current market prices, the stake is worth INR18.4 billion ($372 million), although BT may not divest it all at once.
Advent is currently conducting due diligence on the firm and has hired Bain & Company to advise on the deal, The Business Standard reported, citing sources familiar with the situation. BT initially appointed Credit Suisse to assess potential buyers for the holding.
The private equity firm is expected to seek co-investors for the deal. Last year it was reported that Goldman Sachs, Providence Equity Partners and Apax Partners had all expressed an interest Tech Mahindra.
Last December, parent company Mahindra & Mahindra acquired 5.5% of BT's interest in Tech Mahindra, taking its overall stake closer to the majority market and enabling the UK firm to sell to non-strategic third-party investors like private equity funds.
BT is likely to make a significant return on its initial investment. The telecom operator subscribed to Tech Mahindra's IPO at INR3.32 per share and the stock closed at INR625.25 on Friday. However, BT has also provided Tech Mahindra with well over $1 billion in business over the course of the last decade and accounts for 40% of its revenue.
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