Private Equity firm Blackstone, made a $2.8 billion offer to gain additional 26% stake in Mphasis Ltd. As it is looking forward to consolidate its holding in the Bangalore based ITO service provider as a sudden raise in cloud computing.
A joint statement said that a wholly owned subsidiary of ADIA (Abu Dhabi Investment Authority), UC Investments and other investors who are investing in the firm from a long term will be co-investing alongside Blackstone.
Blackstone back in 2016 bought majority 60.5% stake in Mphasis from Hewlett Packard Enterprise Co for Rs.430 a share and now will acquire additional shares for Rs.1452 to Rs.1497 per piece. The open offer subscription, (12-16 per cent premium to 12-month average price and 3-6 per cent discount to 6-month average price) and the purchases will vary between Rs 15,200 crore to Rs 21,000 crore (approximately USD 2-2.8 billion).
In a regulatory filing Mphasis said, “BCP Topco IX Pte Ltd along with Blackstone Capital Partners Asia NQ LP and Blackstone Capital Partners (CYM) VIII AIV – F LP… have announced an open offer for acquisition of up to 49,263,203 fully paid-up equity shares… from the public shareholders of Mphasis Ltd, representing 26 per cent of the Expanded Voting Share Capital, at a price of Rs 1,677.16 per equity share.”
Amit Dixit, Co-head of acquisitions and head of India for Blackstone Private Equity, said that, “Mphasis is exceptionally well-positioned given a terrific management team, strong order backlog, long-term strategic customer base, deep domain expertise in financial services, and a world-class suite of cloud and digital offerings.”
He also added to his statement, “This investment will enable us to continue creating value for the long term with continuity in the management team and the board, and provide additional resources to further accelerate the company’s growth momentum the. We are thankful to our customers, investors, employees and board for their continued support.”
In the regulatory filing the firm disclosed that there will be an additional 59,500 employee stock options that will be versed between the date of public announcement and 31st August 2021. The sale is expected to complete in the upcoming months and regulatory approvals.
The CEO and Executive Director of Mphasis, Nitin Rakesh said, “Blackstone’s sustained strategic partnership will help the company accelerate its growth and scale new heights. Sovereign and pension funds co-investing is a testimony of long-term commitment and a vote of confidence of a marquee set of shareholders.”