Five years after buying a significant minority stake in healthcare technology company Citius Tech, private equity firm General Atlantic is looking to cash out. The US-based growth equity fund has appointed JP Morgan to manage the formal process that is likely to see a controlling stake in the company being sold, said several people with knowledge of the matter.
The investment bank has sent feelers to bulge-bracket funds such as Apax Partners, Advent, Bain Capital, Carlyle, Blackstone, CVC Capital Partners and Warburg Pincus ahead of the process getting launched in the coming days as mid-tier IT consolidation gathers momentum.
Sources said the company is being valued at around $800 million, though most expect a keenly contested auction to raise that to the $1billion mark.
GA invested $111.25 million in March 2014 and owns around 32% of the company with founders Rizwan Koita, fellow Indian Institute of Technology alum Jagdish Moorjani and employees holding the rest. Based on the final valuation, the two founders and principal shareholders will take a call on the quantum of the secondary sale. They are still keen to run the company even as junior partners going forward to enjoy the upside potential.
“The founders are open to giving up control but would want to run the company for the sake of continuity and growth. This is a fast-growing, high-margin company that is working in digital IT services handling sensitive clinical data in the US,” said an analyst specialising in this space.
GA, Koita, JP Morgan, Blackstone, CVC, Carlyle, Bain and Advent declined to comment.
Source: Economic Times