Blackstone to pay up to $1.1b for India's Mphasis

Hewlett Packard currently owns 127 million shares of Mphasis, or a 60.5% stake. According to a filing, Blackstone will initially purchase 106 million shares, paying INR430 apiece. The sale will trigger a mandatory open offer for an additional 55 million shares at INR457 each. Depending on the results of the offer, Blackstone may then buy Hewlett Packard's remaining stake.

Mphasis offers business process outsourcing (BPO) and infrastructure services to companies worldwide in the banking, financial services and insurance sectors. It employs 24,000 people in 16 countries, and claimed revenue of INR60 billion for the year ended December 2015, with profit of INR6.9 billion. Mphasis shares closed at INR455 on April 4.

Hewlett Packard acquired its stake in Mphasis in 2008 when it bought parent company Electronic Data Systems. The company first indicated its desire to sell in 2013.

At the time, negotiations focused on the amount of business that HP would commit over the long term; HP's clients comprise half of Mphasis' revenue. As part of the takeover agreement, HP has proposed a master services agreement that will see it commit $990 million in revenue over the next five years, with three automatic renewals of two years each. HP will also include Mphasis in its preferred provider program.

Blackstone is an active investor in India's BPO sector, with notable recent deals including the GBP250 million ($387 million) buyback of Intelenet Global Services from Serco Group, to which Blackstone had sold the company in 2011. The GP recently closed its latest global fund at $18 billion.

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• Topics
• South Asia
• Technology
• Support services
• Buyouts
• Open market
• India
• The Blackstone Group