GIC, Bain and Advent take stakes in QuEST

The private equity funds bought their combined stake from Warburg Pincus, which is making a 4x return on its original investment.

Singapore’s Government Investment Corporation (GIC,) and private equity firms Bain Capital and Advent International have acquired a combined INR 3,500 crores ($350 million; €316 million) minority stake in engineering company Quality Engineering and Software Technologies (QuEST) from Warburg Pincus, according to a company news release.

While details about the size of the stake were not disclosed, the deal will value the Singapore-based company at about $1 billion, according to reports.

Bain structured the investment through its Asia Fund II, a 2012-vintage vehicle that closed on $2.3 billion. Some investments from the fund include a 50 percent stake in Japanese television shopping channel Jupiter Shop Channel and an 80 percent stake in China-based Lionbridge Financial Leasing.

Advent’s other investments in Asia include Indian consumer products manufacturer Crompton Greaves Consumer Electricals Limited and Singapore-based tutorial services provider The Learning Lab. 

Private equity firms Baring Private Equity Asia, Apax Partners and General Atlantic also participated in the bidding.

Warburg Pincus had invested $75 million for a 26 percent stake in the company in 2010 and is exiting with a near fourfold return on investment, according to reports. 

The Carlyle Group made a venture capital investment of $6 million in QueEST in 2003 from Carlyle Asia Venture Partners II, a $170 million fund that invests in technology companies in Asia and India. In 2007, the company bought back its shares from Carlyle, backed by the ICICI Bank.

Singapore-based QuEST is a leading provider of engineering solutions for advanced technology products in the aerospace, automotive and power generation, oil and gas, and industrial product domains. It was founded by Ajit Prabhu and Aravind Melligeri in 1997 in New York and later established in Bangalore, India in 1998. 

In 2011, the company acquired the engineering services division of UK-based GKN Aerospace Services Ltd for an undisclosed sum, the company said in a statement. In February 2015, it announced the acquisition of German company Engineering und Design imFahrzeugbau (EDF) GmbH to gain a stronger presence in its core target markets of Western Europe, specifically in Germany. It employs over 8,200 workers across nine countries with delivery centres in the US, Singapore, UK, Germany, Italy, Spain, France, Japan, and India. QuEST’s customers include Rolls Royce, General Electric, United Technologies, Airbus, Halliburton, Siemens and Toshiba.

“We started QuEST with the vision of becoming the most recognised and trusted global engineering partner for our customers,” said Ajit Prabhu, co-founder, chairman and CEO of QuEST. “This investment by three of the most respected global investors reflects the progress we are making. It also crystallises the value we have created for our shareholders and employees who have placed their belief in us and partnered with us in this journey.”

Bain and GIC were advised by Kirkland and Ellis. Credit Suisse was financial advisor to QuEST on the transaction.