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Baring Private Equity Asia will buy a controlling stake in outsourcing firm Hexaware Technologies Ltd for up to Rs 2,745 crore (about USD 420 million), one of the largest deals in Indian IT services space.
Baring will buy out promoters led by Atul Nishar and GA Global Investment Ltd's 41.8 per cent stake at Rs 126 or Rs 135 per share for an aggregate Rs 1,575 crore to Rs 1,687 crore. It will buy Hexaware founders' 27.7 per cent stake and 14.1 per cent from private equity firm General Atlantic.
Post buyout, Baring will make a mandatory tender offer to minority shareholders of Hexaware for up to 26 per cent of the company at Rs 135 a share aggregating to Rs 1,058 crore.
In a statement today, Hexaware said: ""Affiliates of Baring Private Equity Asia have signed definitive agreements to purchase approximately 125 million Hexaware shares, from promoter entities, led by Atul Nishar and GA Global Investments, an affiliate of General Atlantic in aggregate representing 41.8 per cent shareholding in Hexaware."
Shares of Hexaware ended at Rs 120.75 apiece, up 1.60 per cent compared to yesterday.
Atul Nishar will continue as non-executive chairman of Hexaware and P R Chandrasekar will continue as CEO of Hexaware, it added.
Big-ticket deals in the listed Indian IT space include US-based iGATE buying controlling stake in Patni Computers for USD 1.22 billion in 2011, Tech Mahindra acquiring Satyam Computers for over USD 580 million in 2009, EDS controlling MphasiS through multiple transactions for over USD 380 million and Oracle Corp buying i-flex solutions for about USD 909 million in 2005.
Morgan Stanley acted as primary financial advisor and Credit Suisse as co-advisor to promoter entities and General Atlantic AZB & Partners acted as legal counsel for the sellers, it said.
In addition J Sagar Associates acted as legal advisors for the promoter. Khaitan and Co and Allen & Overy LLP acted as legal advisors to Baring Private Equity Asia, it added.
Meanwhile, in a BSE filing, Hexaware said its board of directors at a meeting held today "have been notified and have acknowledged that Elder Infosystem Pvt Ltd and Elder Venture LLP (both of whom were disclosed as "promoters") and GA Global Investments Limited have entered into a share purchase agreements with HT Global IT Solutions Holdings Ltd."
HT Global IT Solutions Holdings is a company under the laws of Mauritius and is an affiliate of Baring Private Equity Asia, the filing added.
Hexaware also said: "In accordance with the requirements under SEBI Regulations, 2011, Baring Asia will make a public announcement for an open offer to the public shareholders of Hexaware to purchase up to an additional 26 per cent stake at a price of Rs 135 per share aggregating Rs 1,058 crore."
Baring to buy controlling stake in Hexaware for $400 mn: sources
(Reuters) Baring Private Equity Asia is set to buy a controlling stake in Hexaware Technologies Ltd, an Indian outsourcing services provider, for about $400 million, two sources with direct knowledge of the matter said on Friday.
The deal is expected to be approved by the Hexaware board as early as Friday, said the sources, who declined to be named before a public announcement. A spokeswoman for Hexaware did not have immediate comment.
Baring will roughly buy a 42 per cent stake in Hexaware from the Indian company's founders and private equity investor General Atlantic. It will then have to make a mandatory tender offer for up to 26 per cent, the sources said.
Baring is one of the largest independent private equity firms in Asia, with over $5 billion in capital under management. In May, Baring agreed to invest $260 million in French cement maker Lafarge SA's India operations.
Hexaware develops software and provides business process outsourcing services to overseas clients. Its rivals in India's $108 billion outsourcing industry include Infosysand Tata Consultancy Services (TCS).