 "At Rs 1,687 cr, Baring's Hexaware buy largest PE investment in India IT")
New Delhi: Baring Private Equity Asia will buy a controlling stake in Indian outsourcing firm Hexaware Technologies for up to Rs 1,687 crore.
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.
[caption id=“attachment_1058007” align=“alignright” width=“380”]  Baring Private Equity Asia will buy a controlling stake in Indian outsourcing firm Hexaware Technologies for up to Rs 1,687 crore.[/caption]
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.
“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,” Hexaware said in a statement.
Atul Nishar will continue as non-executive chairman of Hexaware and P.R. Chandrasekar will continue as CEO of Hexaware, it added.
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.
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More ShortsIn 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 on August 23, 2013 “have been notified and have acknowledged that Elder Infosystem Pvt Ltd and Elder Venture LLP (both of whom were disclosed as “promoters” in the disclosures filed by the Company with the stock exchanges) 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.
“In accordance with the requirements under SEBI (Substantial Acquisition of Shares and Takeovers) 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 (approximately USD 160 million based on Rs/USD rate of 65),“the company statement also said.
Shares of Hexaware ended at Rs 120.75 apiece, up 1.60 per cent compared to yesterday.
“Hexaware will remain a public company and the management team led by P R Chandrasekar will continue ensuring continuity of relationships with all stakeholders particularly our customers, employees and public shareholders,“commenting on the agreement, Hexaware Chairman Atul Nishar said.
The deal is subject to customary conditions, including receipt of required regulatory approval, including anti-trust and competition clearances from the Competition Commission of India and is expected to close by the end of this year, the statement said.
Hexaware has 8,700 employees, over 200 active customers, 8 global development centres, presence in 35 countries and reported revenues of $364 million for the financial year ended December 31, 2012, it added.
“The total potential investment of over USD 465 million will be the largest investment made by Baring Asia in India, and is one of the largest ever foreign investments in the IT services sector in India,” Baring Private Equity Asia Chief Executive & Founding Partner Jean Salata said.
In a separate BSE filing, Hexaware informed about the Open Offer for acquisition of up to 7.83 crore of its shares, which amounts to 26 per cent, from hexaware shareholders by HT Global IT Solutions Holdings Ltd along with Parel Investment Holdings Ltd and Baring Asia Private Equity Fund.
“Open offer for acquisition of up to 7,83,49,823 fully paid-up equity shares of face value of Rs 2 each, representing 26 per cent of the total share capital of Hexaware on a fully diluted basis, as of the tenth working day from the closure of the tendering period of the open offer,” it added.
The offer price is Rs 135 per share, aggregating to Rs 10,57,72,26,105 assuming full acceptance and the offer price will be payable in cash by the acquirer, the filing said.
Commenting on the agreement, Hexaware Chairman Atul Nishar said: “Hexaware will remain a public company and the management team led by P R Chandrasekar will continue ensuring continuity of relationships with all stakeholders particularly our customers, employees and public shareholders.”
The deal is subject to customary conditions, including receipt of required regulatory approval, including anti-trust and competition clearances from the Competition Commission of India and is expected to close by the end of this year, the statement said.
Hexaware has 8,700 employees, over 200 active customers, 8 global development centres, presence in 35 countries and reported revenues of USD 364 million for the financial year ended December 31, 2012, it added.
“The total potential investment of over USD 465 million will be the largest investment made by Baring Asia in India, and is one of the largest ever foreign investments in the IT services sector in India,” Baring Private Equity Asia Chief Executive & Founding Partner Jean Salata said.
In a separate BSE filing, Hexaware informed about the Open Offer for acquisition of up to 7.83 crore of its shares, which amounts to 26 per cent, from Hexaware shareholders by HT Global IT Solutions Holdings Ltd along with Parel Investment Holdings Ltd and Baring Asia Private Equity Fund.
“Open offer for acquisition of up to 7,83,49,823 fully paid-up equity shares of face value of Rs 2 each, representing 26 per cent of the total share capital of Hexaware on a fully diluted basis, as of the tenth working day from the closure of the tendering period of the open offer,” it added.
The offer price is Rs 135 per share, aggregating to Rs 10,57,72,26,105 assuming full acceptance and the offer price will be payable in cash by the acquirer, the filing said.
ICICI Securities Ltd is acting as the manager to the offer, it added. RNKICICI Securities Ltd is acting as the manager to the offer, it added.
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