Europe’s largest private equity (PE) firm EQT with € 73.4 billion in assets, is buying out Baring Asia Private Equity for $7.5 billion (around ₹ 57,150 crore) is another consolidation within the PE/venture capital (VC) industry. However, it is significant for the IT industry and more so in the Indian context as Baring Asia has been investing in the country since 2006. The acquisition will give a strong IT portfolio for EQT in India.
In the past, Sequoia Capital acquired Westbridge Capital and Accel acquired Erasmic Venture Fund (to enter India).
In 2020, EQT forayed into India by joining hands with Singapore’s Temasek with a commitment to invest $500 million to set up a renewable energy platform to build solar and wind farms.
Baring is a big player in IT and business services with its portfolio including companies like Coforge (formerly NIIT), Virtusa, IGT Solutions, Straive (formerly SPi Global) and HGS’s healthcare division, said Stanton Jones, Director and Principal Analyst at ISG, a global technology research and advisory firm.
Last year, Baring sold portfolio company Hexaware to Carlyle for $3 billion. Private equity has been exceptionally active in the technology sector of late. Last year it made 187 acquisitions with a value of over $256 billion ( around ₹ 19,500 crore) – both all-time records, he said.
In recent years, Baring Asia has become a technology outsourcing sector specialist, with a focus on control/buyout deals. They are likely to be a key player in any consolidation moves in the sector, especially in the mid-market, said Arun Natarajan, Founder, Venture Intelligence, which tracks PE/VC investments.
Baring Asia which has been investing in India since 2006 currently has an IT Services & BPO heavy portfolio including Hinduja Global, Virtusa, CitiusTech, Coforge and AGS Health. Baring Asia’s other investments include RBL Bank, O2 Power and RSP Architects & Planners India.
The combined firm, with deeper pockets and access to global relationships, is likely to emerge as a key player in any consolidation moves in the Indian outsourcing sector, he said.
Other than IT, Baring Asia has also invested in sectors like cement (Lafarge), renewable energy (Auro Mira and Coastal Projects), edible oil (KS Oils), broking (Sharekhan and Karvy) and knitted garments (Pratibha Syntex), said Natarajan.