Baring Asia to take majority stake in India’s Hexaware, General Atlantic exits

GA bought a 14.99% stake in the company in 2006 for INR3.20 billion (then $67.6 million) at around INR142.10 per share. Baring will buy GA's holding, now 14.1%, for INR126 or INR135 per share, with the higher price payable if the buyer acquires at least 50% of the company.

The founders' 27.7% is to be bought on the same terms, adding up to a total of 125 million shares for INR15.75-16.87 billion ($244 - 261.9 million)

Hexaware shares closed at INR120.75 on Friday.

The price for the tender offer to acquire the additional 26% stake has been set at INR135 per share, adding up to INR10.58 billion. ChrysCapital Partners is also an investor in the company, with a 9.59% holding bought for $14.6 million.

The deal values Hexaware at about 8.5x EBITDA. The company's revenues grew 32.91% year-on-year to INR19.92 billion for the financial year ended December 2012, while net income improved 22.70% to INR3.28 billion. Hexaware has 8,700 employees, over 200 active customers and a presence in 35 countries.

"The total potential investment of over $465 million will be the largest investment made by Baring Asia in India, and is one of the largest ever foreign investments in the IT services sector in India, a sector where India continues to have a strong global competitive advantage," said Jean Salata, the private equity firm's CEO and founding partner.

Hexaware will remain a public company. Atul Nishar and P.R. Chandrasekar will continue as non-executive chairman and CEO respectively.

In May Baring acquired a 14% stake in the Indian subsidiary of French building materials maker Lafarge, for INR14 billion ($256 million). The firm is currently investing from its fifth pan-Asia fund, which closed in 2011 at $2.46 billion.

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• Topics
• South Asia
• PIPEs
• Buyouts
• Technology
• India
• Baring Private Equity Asia
• PIPE
• General Atlantic
• Technology