Warburg Pincus’ Indian portfolio company acquires

World Network Services, the Indian back office services company in which Warburg Pincus has a 70 per cent stake, has made its first UK acquisition.


Indian back office services company WNS, which is co-owned by British Airways and Warburg Pincus following the private equity firm’s acquisition of a 70 per cent stake in early April, has made its first acquisition as it looks to diversify from its traditional back office activities. The firm has acquired Town & Country Assistance, an insurance claims management company based in the UK which employs 165 people. The cost of the acquisition has not been disclosed.

Warburg Pincus is looking to grow WNS rapidly over the coming years as it looks to capitalise on the rapidly growing outsourcing markets. India has established itself as a global centre for outsourcing, particularly in the IT and related sectors, where it can provide a highly-skilled English speaking workforce at more competitive costs to its European counterparts.

Earlier this year Jeremy Young, business services partner at Warburg Pincus in London, said the firm was willing to invest in the region of £200m to establish WNS as a global leader in outsourcing services. “We are looking to grow the firm organically as well as through acquisitions.” He said the firm was looking to expand in the UK, and that the US could be a target for ‘major growth’.

Warburg Pincus estimates the business process outsourcing (BPO) sector to be worth $110bn annually, with year on year growth of around 20 per cent. Young added that WNS’s established presence in the sector, coupled with its reputation and branding, will make it a strong candidate to profit from advances in technology that will enable the firm to employ high quality staff around the world at low cost. ‘Clients are very enthusiastic because India has the largest, most inexpensive, highly skilled English-speaking labour force in the world,’ said Ray Marshall, MD of WNS.

Warburg Pincus is investing in WNS from its European funds, primarily the Warburg Pincus International and Warburg Pincus Equity funds. The firm invests across business services, communications, financial services, healthcare and life sciences, IT and media. Warburg Pincus has invested over $650m in India to date, its biggest exposure in the Asia-Pacific region.

A growing number of private equity firms are targeting the Indian market. Last year the country attracted $841m in venture capital investment, making it the largest recipient of funding ahead of both China and Australia. The Carlyle Asia Partners II fund, which closed at $170m in May this year, is looking to allocate around 35 per cent of its total funding to India, with Carlyle Asia’s managing partner describing India as ‘a global powerhouse in industrial servicing.’

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