Baring Asia completes $386m recap of CitiusTech
Baring Private Equity Asia (BPEA) has completed a USD 385.9m dividend recap and refinancing of loans tied to its 2019 acquisition of India-based healthcare IT services business CitiusTech.
No further information was disclosed regarding the transaction. The private equity firm bought about 80% of CitiusTech, taking out a minority position held by General Atlantic and acquiring further shares from the founders. The approximately USD 800m deal was supported by supported by a USD 265m five-year secured amortising loan, according to Debtwire, AVCJ’s sister title.
Established in 2005, CitiusTech employs more than 6,000 healthcare professionals out of eight locations in North America, one each in the UK, Dubai, and Singapore, and seven in India. The India operation handles most of the backend services. The company has over 130 clients in the healthcare and life sciences space.
It services encompass business consultation, which involves helping companies optimise and digitalise clinical and administrative processes, patient engagement, and product and project lifecycle strategies; developing mass-market software suites and customised digital products; and providing outsourced solutions in areas ranging from payments to medical technology.
IT services is one of BPEA’s core strategies and the private equity firm increasingly targets niche verticals, as direct investments or as bolt-on acquisitions for existing portfolio companies. It bought AGS Healthcare the same year as CitiusTech and added Hinduja Global Solutions, a unit of Anglo-Indian conglomerate Hinduja Group, in 2021 at an enterprise valuation of USD 1.2bn.
Like most private equity firms, BPEA responded to the pandemic at a portfolio level by scrutinising cash reserves and cost structures, as well as operational sustainability. Best practices were shared among the IT services companies, and it soon became apparent that a rebound was underway. Corporates were not cutting IT spend; in fact, they were investing in work-from-home platforms.
“Helped by some farsighted CEOs who introduced contingency measures, we were able to demonstrate to customers that we could still deliver services,” Kenneth Cheong, a managing director at BPEA, recently told AVCJ. “We saw a surge in business as other companies in the space were not able to react as quickly and meet their service level offerings in terms of security and privacy.”
Kirkland & Ellis served as lead counsel to BPEA on the CitiusTech dividend recap and refinancing.
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