Switzerland-based investment firm Partners Group Monday said it has acquired 48% stake from Apax Funds in GlobalLogic Inc., an information technology outsourcing firm. The deal valued at close to $1 billion offers an exit to Apax Funds with over 4.5x returns on its investment.
Founded as IndusLogic by four IIT graduates—Rajul Garg, Manoj Agarwala, Sanjay Singh and Tarun Upadhyay—in Virginia in 2000, the firm was acquired by Apax Funds in 2013 for $420 million. The current investment by Partners Group values the California-based GlobalLogic at $2 billion.
Both Partners Group and Canada Pension Plan Investment Board (CPPIB) will hold 48% each in GlobalLogic. The balance 4% stake is held by the management. In January 2017, Apax had sold its 48% stake to CPPIB, making a part-exit from the company, clocking over three times returns. According to the joint statement issued on Monday, GlobalLogic has revenue of over $500 million, with the firm doubling its revenue and earnings before interest, tax, depreciation and amortization from 2013.
GlobalLogic has its core operations in India with engineering centres in Hyderabad, Gurugram, Chennai, Bengaluru, Noida and Nagpur. Its offerings include product and content engineering and digital services catering to sectors like retail, communications and media, automotive, electronics and medical technology, among others. It specializes in areas like cloud, Internet of Things, big data, mobile and web applications.
“Digital transformation throughout the economy is driving demand for next-generation product engineering services, a long-term trend we expect to continue for many years. GlobalLogic is a market outperformer with strong momentum and a talented management team,” said Todd Miller, managing director, private equity Americas, Partners Group.
The deal also marks one of the biggest exits by a private equity firm in the Indian technology space. Apax had also partnered with IGate Corp. to buy out Patni Computers Systems Ltd. In 2015, it sold the combined entity to Capgemini for a whopping $4 billion, the biggest deal in the Indian technology sector. Some of the other investments by the private equity firm in India include Zensar Technologies Ltd, Shriram City Union Finance and Cholamandalam Investment and Finance.
“CPPIB plans to continue to invest in GlobalLogic through its journey as the partner of choice to Fortune 500 companies for digital transformation and core software product development,” said Ryan Selwood, managing director, head of direct private equity, CPPIB.
Meanwhile, Partners Group has been expanding its India portfolio. On Monday, the firm also announced that it will be acquiring Vishal Mega Mart along with Kedaara Capital from TPG Capital and Shriram Group. The deal values the fashion-led retail business at Rs5,000 crore. Some of its India investments include Eurokids, an education firm, CSS Corp and AU Financiers India Ltd.
Source: Mint