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Baring seeks $465m India buyout

The pan-regional private equity firm has agreed to acquire a 41.8% stake in India's Hexaware from the founder and General Atlantic, hoping to acquire a further 26% from shareholders.

In its largest-ever India investment, Baring Private Equity Asia has agreed to acquire IT services and business process outsourcing firm Hexaware Technologies, according to a statement from the target company. 

The firm has entered into agreements to buy a 14.1 percent stake from private equity firm General Atlantic and a further 27.7 percent stake from promoter Atul Nishar for a price of INR 126 (€1.48; $1.99) or INR 135 per share. 

Baring will make a public announcement for an open offer to the public shareholders to purchase up to an additional 26 percent stake. The higher price of INR 135 per share will be paid upon Baring reaching 50 percent or above of the aggregate shareholding, taking the total potential deal value to $465 million, according to the statement. 

“We are excited about supporting the next phase of growth of the business. Hexaware has an experienced management team, excellent customer relationships, a consistent track record and the ability to provide diverse services on a global scale,” Jean Salata, chief executive and founding partner of Baring, said in a statement. 

The total potential investment of over $465 million will be the largest investment made by Baring Asia in India, and is one of the largest ever foreign investments in the IT services sector in India

Jean Salata, chief executive, Baring Private Equity Asia

He added, “The total potential investment of over $465 million will be the largest investment made by Baring Asia in India, and is one of the largest ever foreign investments in the IT services sector in India, a sector where India continues to have a strong global competitive advantage.”

The deal is Baring’s second significant investment in India recently. In May, the firm invested $256 million in a 14 percent stake in cement producer Lafarge India – its largest investment in India at the time. The firm has also been active in Korea, completing a $140 million leveraged-buyout of parcel delivery company Logen, Private Equity International reported earlier. 

Baring’s activity in Asia has been increasing, having realised investments totaling about $800 million and representing an average multiple of over four times during the 18 months preceding April 2013, Salata told PEI in an earlier interview. The firm is currently investing from its $2.46 billion Fund V, which it raised in 2011.