New Enterprise Associates India and Jacob Ballas Capital India are in talks to buy The Carlyle Group's stake in Chennai-headquartered Financial Software & Systems (FSS), an industry source has confirmed.
According to reports in The Economic Times, the private equity firms are seeking a 40 percent stake in FSS for $60 million, in a deal that would involve purchasing Carlyle’s 34 percent stake in the company. This would value the company at nearly twice its annual revenue, sources told the Indian daily.
Discussions, however, are at a very early stage, said an industry source. Carlyle and Jacob Ballas declined to comment. NEA India did not reply to requests for comment at press time.
Carlyle first invested in FSS in November 2000. The transaction was made out of the $159 million Carlyle Asia Venture Partners 1, which targeted emerging technology companies. Carlyle has since made additional investments in the company, according to FSS’ website, though it is unclear precisely how much.
Delhi-based Jacob Ballas closed NYLIM Jacob Ballas India Fund III on $440 million this January. Currently, the growth capital fund has deployed approximately 20 percent of its capital. Its previous investments include Aster Teleservices, an infrastructure company; insulator manufacturer Saravana Global Energy; and pharmaceutical company Themis Laboratories. The firm typically invests between $15 million and $60 million per deal.
NEA India is a subsidiary of Silicon Valley venture firm New Enterprise Associates. The firm’s previous investments include computing company Novatium; software provider Sasken Communications; and outsourced mortgage processor ISGN Technologies.
FSS offers systems integration services and software such as payments processing to the banking sector. Its solutions include internet, mobile, commerce gateways, electronic bill payment and card processing and management systems.