Mumbai: Private equity (PE) investor General Atlantic Llc. (GA), headquartered in New York, has stepped up its pace of dealmaking in the country. It has closed three deals worth more than $175 million (about Rs744 crore) in the first seven months of the year, including the $60 million investment in Thiruvananthapuram-based transportation and logistics software firm IBS Software Services that was announced on Wednesday. The change of pace, in terms of the number of deals, is significant when seen in the context of the six deals the $17 billion PE firm had concluded till December 2006, five years after it started investing here in 2002.
IBS marks GA’s ninth investment in India and its fourth in the information technology services sector. The firm has invested more than $700 million in the country till date and its largest investment here has been $250 million in Gurgaon-based business process outsourcing (BPO) firm Genpact Ltd in 2004 for a 30% stake. The BPO, which was spun off from General Electric Co., will make an initial public offering (IPO) on the New York Stock Exchange soon and expects to raise $731 million. GA is expected to partially exit Genpact at the time of the listing.
While IT and IT-enabled services continue to be key focus areas for GA in India, the company also plans to widen the scope of its investments into new areas such as infrastructure and health care.
GA managing director and vice-chairman Mark F. Dzialga had earlier told Mint that the firm would make two-to-five investments a year in India and work towards 10-15 active investments over a period of time. GA started with mid-sized deals of $20-70 million each, and has recently done larger deals, including Genpact and a $115 million investment in the National Stock Exchange, for a 5% stake.
The PE investor has taken a minority stake in IBS Software Services, but the percentage was not disclosed. IBS Software Services plans to use the funding to boost its sales and marketing teams, increase its business consulting services and make two acquisitions in the US or Europe.
V.K. Mathews, chairman and managing director of the IBS Group, said the company is talking to acquisition targets that are in the aircraft maintenance and engineering sectors, and those that help suppliers manage demand from consumer channels such as travel websites.
GA India managing director Abhay Havaldar was not available for comments.
IBS has offices across the US, the UK, Dubai, Australia, India and Japan, with its Asian headquarters in Thiruvananthapuram. Its main competitors are outside India, and include Unisys Corp. and Lufthansa Systems.
For the most recent fiscal year, the company’s turnover was $50 million and Mathews projected $80 million in revenues for 2007. The company has more than 70 customers and 1,700 employees.
“Our IP assets have already been created. It is time for us to exploit the IP by promoting it globally,” said Mathews. The company expects to go in for an IPO in 2009-2010.