Private equity (PE) firm Advent International has acquired a majority stake in Encora, a digital engineering services company specialising in software product development services, from majority shareholder Warburg Pincus, the company said in a press statement on Wednesday.
After the deal, existing majority shareholder Warburg Pincus will retain a minority stake in Encora.
“We are thrilled to enter into this partnership with Advent as we continue to scale our differentiated software engineering service offerings,” said Venu Raghavan, Chief Executive Officer, Encora. “Advent’s deep business and technology services sector expertise, along with its global footprint, complements Encora’s strengths and creates opportunities to grow our business in key markets around the world. Warburg Pincus has been a great partner to us over the last two-and-a-half years, accelerating our rapid growth to a valuation of approximately $1.5 billion,” he added.
Encora said in the statement that it provides software product development outsourcing services utilising technical expertise for machine learning, artificial intelligence (AI), data science, cloud services, and other next-generation digital engineering disciplines, to accelerate strategic innovation for tech-enabled companies whose market position and growth are fueled by proprietary software products.
The company has expanded its focus to consumer and enterprise technology, and its talent pool has grown to over 6,300 colleagues spread across 40 global offices in Latin America, India, Asia, and the United States.
Encora said that this new partnership would allow it to develop its differentiated delivery approach and enhance its customer-facing digital services, both organically and through targeted M&A prospects.
J.P. Morgan acted as financial advisor to Encora for the transaction and Wilson, Sonsini, Goodrich & Rosati LLP served as its legal advisor. Credit Suisse acted as financial advisor to Advent, and Weil, Gotshtal & Manges LLP served as its legal advisor.
With $81 billion in assets as of 30 June, 2021, Advent has invested in over 380 firms in 42 countries across North America, Europe, Latin America and Asia, the statement said.
Advent International was founded in 1984, and now has 15 offices in 12 countries. Business and financial services, healthcare, industrial, retail, consumer, leisure, and technology are among the industries it focuses on. The PE firm typically invests between $20 and $60 million in companies in case of a buyout, and between $5 and $20 million in venture capital.
Advent has exposure in companies such as Bharat Serum and Vaccines Ltd, CARE Hospitals, CAMS - Computer Age Management Services, ASK Investment Managers Private Limited, Indian snack-maker DFM Foods and Aditya Birla Capital, as per data from VCCEdge.
Last year, Advent invested in Zenoti, a software provider for salons and spa chains, and before that, it invested in California and Bengaluru-based Tekion Corp, another software as a service firm (SaaS).
In February 2021, Advent made its third pharmaceutical bet, the second in the bulk drugs space, when it agreed to buy a majority stake in ZCL Chemicals (formerly Zandu Chemicals).