Baring Private Equity Asia will buy a controlling stake in outsourcing firm Hexaware Technologies for up to Rs.2,745 crore (about $420 million), one of the largest deals in the domestic IT services space.
Baring will buy out promoters led by Atul Nishar and GA Global Investment’s 41.8 per cent stake at Rs.126 or Rs.135 a share for an aggregate Rs.1,575-1,687 crore. It will buy Hexaware founders’ 27.7 per cent stake and 14.1 per cent from private equity firm General Atlantic.
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 aggregating to Rs.1,058 crore. In a statement on Friday, Hexaware said: “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.”
Shares of Hexaware ended on Friday at Rs.120.75 on the BSE, up 1.60 per cent compared to the previous close.
Mr. 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.
In 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 Friday “have been notified and have acknowledged that Elder Infosystem Pvt. Ltd. and Elder Venture LLP (both of whom were disclosed as ‘promoters’) 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. Hexaware also said: “In accordance with the requirements under SEBI 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 a share aggregating to Rs.1,058 crore.”
Commenting on the agreement, Hexaware Chairman Mr. 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.”
