Capital Square buys majority stake in India's Indecomm
Singapore-based Capital Square Partners has acquired a majority stake in Indecomm Global Services, an Indian IT services provider.
The GP has bought a 55% interest in the company for $90 million, according to The Times of India, facilitating an exit for WestBridge Capital, Tiger Global Management, and the International Finance Corporation (IFC). Capital Square confirmed to AVCJ that it holds a majority stake in the business but declined to comment further.
Indecomm was founded in 2003 as a business process outsourcing (BPO) company specializing in high-speed document imaging technologies and automated data capture. It then expanded into other service areas such as mortgages, healthcare, banking and retail. The company has operations in six countries, with more than 3,500 employees across 21 delivery centers, development labs and offices. It serves over 300 clients globally, including around 20 Fortune 500 companies.
According to AVCJ Research, WestBridge and Acer Technology Ventures provided Indecomm's first institutional funding in 2003, contributing $4 million and $1 million, respectively. IFC then invested $6.5 million in 2005 for an up to 10% stake.
This is the third India BPO deal in three years for Capital Square, which was founded by Sanjay Chakrabarty, formerly a managing director at Colombia Capital. The GP teamed up with Partners Group to buy CSS Corp. for $270 million in 2013 and then worked with CX Partners on the $255 million acquisition of Aditya Birla Minacs Worldwide the following year. US-based Synnex agreed to pay $420 million for Minacs in July.
Both investments were closed on a deal-by-deal basis, with the ultimate objective of raising a blind pool; the GP is now in the process of raising a Southeast Asia and India-focused fund.
The Indecomm deal is further evidence of the ongoing appeal of India's BPO industry to private equity investors. Earlier this year The Blackstone Group agreed to pay up to INR70 billion to Hewlett Packard for a majority stake in IT services provider Mphasis, and Baring Private Equity Asia paid C$1.2 billion ($930 million) for a 35% stake in Telus International, the BPO arm of Canada-based Telus.
More recently, India-based mobile telecommunications company Altruist confirmed it had agreed to buy the India branch of BPO player Vertex Data Science, allowing Oak Hill Capital Partners to exit its holding.
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