Partners Group buys majority stake in India’s CSS Corp - Update

Partners Group did not disclose the size of its holding, but previous reports have put it at 80%. CEO T.G. Ramesh and private equity entrepreneur Sanjay Chakravarty are understood to own the remainder of the company.

It is the largest private equity buyout deal ever seen in India's IT outsourcing industry and the country's second-largest control deal so far this year after KKR's investment in Alliance Tire Group in April.

Both CSS and Alliance can claim to be global businesses, with the former operating out of 13 locations worldwide and claiming a client base that includes the likes of Nortel, Deutsche Bank and Motorola. Annual revenue is said to amount to $200 million.

"CSS Corp. is already a leader in the supply of specialist technological outsourcing services; this is a sector in which we expect to see strong growth going forward as demand for these services increases," said Andreas Baumann, partner and head of Singapore at Partners Group.

The investor will support CSS in its next phase of growth, in which the emphasis will be on the build-out of sales and the further expansion of the firm's service footprint by adding delivery centers in new geographies. CSS will also focus on developing its business in analytics-led customer support, mobility, virtualization and telecom services.

SAIF, Goldman and Sierra own 70% of CSS. SAIF's first investment came in 2006, when it paid $22.5 million for Baring Private Equity Partners India's interest in the business. Goldman Sachs arrived the following year, leading a $25 million round that included Sierra and SAIF.

India's IT outsourcing industry was valued at more than $100 billion last year, with export revenues of $69.1 billion and domestic revenues of $31.7 billion. CSS, like many of the larger players, emerged in the mid-1990s business process outsourcing boom.

While the CSS deal is the largest buyout in the space, there are have been several substantial minority investments.

The Blackstone Group acquired Intelenet Global Services in 2007 for $200 million, selling it four years later to Serco Group for $634 million, while last year Bain Capital paid $1 billion for a 30% interest in Genpact. The sellers, General Atlantic and Oak Hill Capital, still own another 30%.

 

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• Topics
• Buyouts
• South Asia
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• Partners Group
• TMT
• buyout
• India
• Goldman Sachs
• Sierra Ventures
• SAIF Partners