The transaction will lead to a mandatory open offer for the acquisition of up to 26% additional shares of the Indian IT firm
US private equity firm Blackstone has reached agreements to acquire a majority stake in Indian IT firm Mphasis in a $2.8bn deal.
The definitive agreements to buy the stake have been signed by private equity funds managed by Blackstone.
The transaction will see co-investment from a subsidiary of the Abu Dhabi Investment Authority (ADIA), UC Investments and other long-term investors along with Blackstone.
Bengaluru-based Mphasis is one of the major IT services providers, specialising in cloud and digital solutions.
With expertise in serving the Banking, Financial Services and Insurance (BFSI) sectors, the company counts 35 of the top 50 US BFSI firms as its clients.
Blackstone said that Mphasis is seeing strong momentum on new business wins.
Blackstone Private Equity India head and Asia acquisitions co-Head Amit Dixit said: “Information technology and software services have been strong sectors for value creation for the last two decades.
“Mphasis is backed by strong secular tailwinds as global enterprises increasingly migrate to the cloud. The company is exceptionally well-positioned given a terrific management team, strong order backlog, long-term strategic customer base, deep domain expertise in financial services, and a world-class suite of cloud and digital offerings.”
Blackstone said that the transaction will lead to a mandatory open offer for the acquisition of up to 26% additional shares of Mphasis from the public shareholders at a price of INR1,677.16 ($22.48) per share.
Depending on the subscription in the open offer, the blended purchase price is expected to vary between INR1,452 ($19.47) and INR1,497 ($20.07) per share.
Subject to customary closing conditions and regulatory approvals, the transaction is expected to be completed in the coming months.
Dixit said: “This investment enables us to continue creating value for the long term with continuity in the management team and the board, and provide additional resources to further accelerate the company’s growth momentum. We are grateful to Mphasis’ customers, investors, employees and board for their continued support.”
In September 2016, another fund managed by Blackstone had purchased a controlling stake in Mphasis from Hewlett Packard Enterprise (HPE).