India Awards: Exit of the Year – Genpact

General Electric (GE) got in at the beginning of this trend, establishing GE Capital International Services (Gecis) in 1997 to provide internal business support for what became nearly 1,000 business processes across each of the company's 11 business units, including finance and accounting, supply chain management and software development.

In 2004, GE divested a 60% stake in the business to General Atlantic and Oak Hill Capital, each PE firm getting a 30% interest for a combined $500 million. GE held on to the rest.

A General Atlantic spokesperson tells AVCJ that the firm was drawn to Gecis because it had worked with other BPO providers and thought the company was well-positioned to expand beyond its captive client and offer services to other global clients. "We supported this global growth by helping build the management team, providing introductions to major clients, coordinating a rebranding for the firm, building out the board of directors, instituting sound corporate governance and assisting with strategic M&A," the spokesperson says.

The rebranding involved a name change and it was Genpact that ended up going public on the New York Stock Exchange in 2005, raising $500 million through an IPO. This allowed a partial exit for General Atlantic and Oak Hill and they had reduced their holding to around 41% by mid-2012.

Genpact, meanwhile, had been in expansion mode. Over the course of eight years, the company's headcount rose from 17,000 to more than 50,000; it now manages over 3,000 processes for 600 clients in 18 countries, offering a broad range of enterprise and industry-specific services underpinned by strong technological, analytic and reengineering capabilities.

The company reported net income of $191.1 million in 2011, up 28% year-on-year, with revenue rising 27% to $1.6 billion. For the first nine months of 2012, net income and revenue came to $129.7 million and $1.39 billion, respectively.

As General Atlantic and Oak Hill wound up for an exit last year, they were widely expected to sell off their entire holding. In the end, they retained just under 10% of the business, with Bain Capital paying $14.76 per share for 68 million shares - about $1 billion - for a 30% stake.

The two private equity firms each held 4.86% of Genpact as of December, when they announced plans to offload 10.9 million shares at $15.75 apiece, netting up to $171.9 million and reducing their respective holdings to 2.43%. Once the various partial exits and dividends payments are factored in, it is reported that the firms could walk away with around $2 billion.

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• Topics
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• South Asia
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