Partners Group buys majority stake in SPi from CVC

The size of Partners Group’s interest in SPi has not been disclosed, but the target company’s management team will take partial ownership. They will work together on expanding SPi’s service offering, particularly in the business applications segment, and on growth initiatives including bolt-on acquisitions. Partners Group has obtained around $200 million in debt financing for the deal, according to Debtwire.

CVC bought an approximately 80% interest in SPi in 2013 at a valuation of more than $300 million, with debt financing covering half of the commitment. PLDT, the vendor, re-invested $40 million of the proceeds in CVC’s acquisition vehicle, taking a 19.7% stake. It was the Philippines’ largest-ever buyout, although SPi was no stranger to private equity investors – MBO Partners and Electra Partners Asia backed the company in the late 1990s and T.H. Lee Putnam Ventures bought it in 2004.

During the holding period, CVC divested two assets: the healthcare BPO business was sold to US-based Conifer Healthcare Solutions in 2014 in a deal worth $235 million; and Japan’s Relia bought the customer relationship management (CRM) division last year for $180 million.

PLDT said in a statement that it sold an 18.32% interest in SPi to Partners Group and received $53 million in proceeds from the two divestments. CVC's return multiple from the overall investment in SPi is close to 3x, according to a source familiar with the situation.

SPi, which was founded in 1980 and is headquartered in Manila, now focuses on global education, technical and research publishers. Its services span the entire value chain, from author support and content development, through copy editing and typesetting, to digitalization, database management and data analytics. SPi has 12,500 people across 12 locations, working in 14 languages.

“Through best-in-class delivery, technology-enabled efficiencies and global scale, SPi has become a strategic vendor to the largest global publishers. As the publishing world transforms and expands at a rapid pace, SPi has a very exciting opportunity to support its customers with an enhanced range of services and leading edge technology solutions,” Cyrus Driver, managing director and head of private equity direct investment in Asia at Partners Group, said in a statement.

Partners Group’s other direct investments in Asia include another IT services provider, CSS Corp, which was acquired for $270 million in 2013 alongside Capital Square Partners. Last year, the private equity firm bought Guardian Early Learning from Navis Capital Partners for A$440 million ($313 million) and then in March received approval to purchase 30% of China-based restaurant operator Affluent Fine.

There were also two renewables deals in 2016, with $200 million committed to a solar portfolio in Taiwan and A$250 million to a wind energy installation in Australia.

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• Topics
• Southeast Asia
• Trade sale
• Technology
• Support services
• Buyouts
• Philippines
• CVC Capital Partners
• Partners Group