Bain Capital has agreed to buy about 30 per cent of outsourcing firm Genpact for $1 billion (Rs 5,583 crore). The transaction is expected to close later this year.
Bain will nominate four directors on Genpact’s board, replacing the General Atlantic and Oak Hill Capital nominees, Genpact said on Thursday.
The General Atlantic and Oak Hill stake in Genpact will come down to 10 per cent when the deal closes.
They had invested $500 million in Genpact in 2005 when it separated from the erstwhile GE Capital.
Bain will buy around 68 million shares from Genpact's existing investors General Atlantic and Oak Hill Capital at $14.76 a share. Managing $65 billion in assets, Bain will acquire the shares subject to a two-and-a-half year lock-in, the company said. Bain Capital also holds around 7 per cent stake in India’s major two-wheeler maker Hero MotoCorp indirectly, through its 19.8 per cent shareholding in investment arm Hero Investment Pvt Ltd.
“Bain Capital has a long-term perspective, which is critical to building value, particularly in a company like ours,” President and Chief Executive Officer, Genpact, N. V. Tyagarajan said.
He will continue in the company with the same designation.
Listed on the New York Stock Exchange, Genpact began operations in 1997 in India as a service unit of General Electric (GE), assisting its finance division.
Genpact still services GE and gets a quarter of its total revenue from it.
In the second quarter ended June 30, Genpact garnered 27 per cent of its revenue from GE ($126.2 million) of the $467.6 million total revenue.
The company operates from 18 countries, with centres in India, the US, Europe, Africa and Australia. The company has 58,500 employees, of whom more than 43,000 are based in India.
Paul B. Edgerley, Managing Director, Bain Capital, recently said that at least $150-250 million is expected to be invested every year in India, on an average.
“We are open to investing much more if the right opportunity comes, like in Hero MotoCorp, where we put in about $550 million. We expect higher returns as we take more risk in the private equity business than debt investors,” he had said.