Blackstone has entered into an agreement with HP Enterprise to acquire a majority stake in Mphasis in its biggest deal in India till date
Blackstone have announced that private equity funds managed by Blackstone have entered into a definitive agreement with Hewlett Packard Enterprise to buy a majority stake in leading IT services provider Mphasis Limited. The deal will represent the largest acquisition by Blackstone in India.
According to the press release, HPE currently owns 60.5% of Mphasis and Blackstone will pay a purchase price of INR 430 per share for the deal. Based on the open offer subscription, the purchase price consideration is expected to vary between INR 5,466 cr and INR 7,071 cr ($825milion – $1.1billion). Then companies involved have also agreed on the terms of a Master Services Agreement which HPE proposes to sign with Mphasis, post approval by Mphasis’ Board of Directors and shareholders. The duration of the MSA is five years with three automatic renewals of two years each. Under this MSA, HPE has proposed to commit a minimum revenue amount escalating year over year and totaling $990 million over the next five years.
Mphasis has deep vertical expertise in the BFSI sector and strong portfolio focus on new generation services including digital solutions. It was recently named by American Banker and Bank Administration Institute (BAI) as one of the top companies in FinTech and as the “Most Distinguished Digital Company in 2015” by The Economic Times.
Mphasis will be included in HPE’s Preferred Provider Program opening up significant additional revenue opportunities. The sale is expected to complete in the coming months, subject to customary closing conditions and approvals.
Amit Dixit, Senior MD and Co-Head of Private Equity in India at Blackstone said of the landmark acquisition, “We are impressed by Mphasis’ strong domain expertise in BFSI vertical. Its deep relationship with marquee global customers has enabled it to deliver growth above the industry average in its Direct International segment. 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.”
