Companies
With $1 billion, Apax leads in race for Quest Global stake
Summary
In 2016, Advent, Bain and Singapore’s sovereign fund GIC paid around $350 million to buy shares in Quest from Warburg Pincus and other small investors.Private equity firm Apax Partners has emerged as the frontrunner to acquire a stake in engineering services provider Quest Global Services Pte Ltd, two people with knowledge of the development said.
Apax Partners is offering at least $1 billion for an approximately 40% stake in Quest Global Services, one of the people cited above said.
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The transaction will see Quest shareholders Advent International and Bain Capital sell their shares, along with some early investors, they added, requesting anonymity. GIC and the founders may also participate in this transaction by selling some shares, person cited above said.
Quest Global Services was founded by Ajit Prabhu and Aravind Melligeri in Bengaluru in 1997, though it shifted headquarters to Singapore later.
In 2016, Advent, Bain and Singapore’s sovereign fund GIC paid around $350 million (then ₹2,500 crore) to acquire shares in Quest from Warburg Pincus and other small investors.
If consummated, this would be among the larger secondary transactions in the engineering technology services space in India.
Quest Global has seen significant investor interest over the years. In August 2021, Chrys Capital and True North acquired an 8.33% stake in Quest, which valued the business at around $1.8 billion, according to VCCEdge. Chrys Capital and True North are not selling shares in this transaction.
Spokespeople for Apax, Advent International and GIC have declined to comment on the issue. A spokesperson for Bain Capital also declined to comment.
Quest Global chief executive officer Prabhu declined to comment. However, he noted that Quest Global was “playing for the long haul".
“Quest Global has been built to solve some of the hardest engineering problems the world faces today by redefining the meaning of customer focus for the industry. All industries are on the cusp of technological disruption driven by engineers. With a 100% focus on engineering and a multidisciplinary workforce, Quest Global is in a unique position to scale. This simple concept remains our driving force and shall not change," Prabhu said in an emailed response.
Quest provides mechanical, software and digital engineering services to companies in aerospace and defence, high-tech and industrial, medical devices, oil and gas, power, and transportation, according to its website.
Quest Global aims to reach $1 billion in revenue by 2025, up from $620 million, according to a 26 April report by The Hindu Businessline, citing Prabhu.
According to data provider Tracxn, Quest has raised a total funding amount of $581 million and has spent over $101 million for 13 acquisitions globally.
In November, Quest acquired Adept, a product design business, with capabilities in semiconductor and automotive segments, for an undisclosed sum. Its other subsidiaries include Quest Global Engineering, Quality Engineering and Software Technologies, Exilant Technologies, Mobiliya Technologies, Quest Global Engineering Services, and Synapse Design Inc.
Other digital engineering service providers include Global Logic, L&T Technology Services, and Cyient Ltd.
GlobalLogic was acquired by Japan’s Hitachi for about $9.8 billion in March 2021 from Partners Group and Canada Pension Plan Investment Board.
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