The Hindu Business Line : Venture fund buys 4 pc stake in EXLService

PRIVATE equity fund Technology Crossover Ventures (TCV) has acquired four per cent stake in the Nasdaq-headed EXLService Holdings Inc for about $10 million.

According to sources, on December 3, Mr Vikram Talwar (Vice-Chairman and CEO of EXL) and Mr Rohit Kapoor (President and CFO) entered into a stock purchase agreement with TCV V, L.P and TCV V Member Fund, L.P, pursuant to which TCV purchased an aggregate of 4,21,054 shares for a purchase price of $10 million.

TCV adopts a crossover investment model that combines venture capital with public market investing and enables it to continue to invest in its portfolio companies at pre-IPO stage, during the IPO and post-IPO.

The deal assumes significance in the backdrop of the recent announcement by EXL that it plans to go for a Nasdaq listing, thereby, earning itself the distinction of becoming the first Indian BPO company to go for a US listing.

The company, earlier this month, filed a registration statement with the US market regulator, Securities and Exchange Commission, for the IPO of common stock, and the size of the offering is expected to be about $75 million.

Citigroup Global Markets Inc and Goldman Sachs & Co would act as joint lead book-running managers for the offering. The co-managers for the offering would be Merrill Lynch & Co and Thomas Weisel Partners LLC.

It may be recalled that Aviva Plc recently picked-up a strategic stake in EXLService for $12.5 million, which is widely being pegged as being amongst the largest valuation done for a BPO firm.

About three years back, the US insurance giant Conseco had acquired 100 per cent stake in EXL, which was promoted by Mr Talwar. Plagued by financial troubles, Conseco sold its entire stake in EXL to two venture capital funds, Oak Hill Partners and Financial Technology Ventures and Mr Talwar and Mr Kapoor.

EXLService, an independent provider of integrated business process outsourcing solutions specialises in the banking, financial services, and insurance sector. EXL provides services to marquee Fortune 500 and Global 2000 corporations primarily headquartered in the US and the UK.

It has four service delivery centres, based in India (Noida and Pune) with capacity of 3,700 workstations/shift.

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