Blackstone on Monday announced that it has entered into an agreement with Hewlett Packard Enterprise (HPE) to buy a majority stake in Mphasis Ltd., a leading Information Technology services provider offering Applications, Business Process Outsourcing and Infrastructure Services. The deal represents the largest acquisition by Blackstone in India.
HPE currently owns 60.5% of Mphasis. Blackstone will pay a purchase price of Rs430 per share to HPE. Mphasis is listed on the National Stock Exchange and Bombay Stock Exchange in India. As per the Takeover Code in India, this transaction will trigger a mandatory open offer for a purchase of additional 26% shares of the company and the acquiring entity has released a public announcement to the stock exchanges. Based on the open offer subscription, the purchase price consideration will vary between Rs5,466 crore and Rs 7,071 crore (or, about $825 million - $1.1 billion).
Mphasis’ last twelve months revenue as of December 31, 2015 was $904 million and Profit after Tax was $104 million. It has deep vertical expertise in Banking, Financial Services and Insurance (BFSI) sector and strong portfolio focus on New Generation Services including Digital solutions. Mphasis serves marquee customers across the globe including 6 top global banks, 11 out of 15 top mortgage lenders, and 3 top global insurance companies. The company has roughly 24,000 employees across 16 countries.
The sale is expected to complete in the coming months, subject to customary closing conditions and approvals.
Amit Dixit, Senior Managing Director and Co-Head of Private Equity in India at Blackstone, said: “We see large potential going forward driven by Mphasis’ world-class delivery capabilities and its access to Blackstone’s portfolio of companies across the globe. The company has an experienced management team who has a clear roadmap for company’s growth. With a long-term commitment of company’s largest customer, HPE, we are confident that Mphasis will scale new heights.”