Private equity major Apax Partners has closed its second deal in the Indian information technology space by acquiring GlobalLogic, an offshore software R&D services provider. The acquisition is being done through ODSA Topco Ltd, a company backed by Apax Partners.
Terms of the transaction were not disclosed but a report in The Times of India pegged the deal size at $420 million. The transaction is subject to customary closing conditions and is expected to be completed before the end of 2013.
"The agreement will further enable GlobalLogic to deliver design and engineering solutions to companies worldwide, and continue as a leading provider of software R&D services," Apax Partners said in a statement.
GlobalLogic has been backed by a slew of venture capital investors like WestBridge Capital, New Atlantic Ventures (NAV), New Enterprise Associates (NEA) and Sequoia Capital. In 2010 it also raised capital from Goldman Sachs Asset Management International, which was expected to be a pre-IPO investment.
The deal is expected to give an exit to these investors.
The transaction is the third investment by Apax Partners, which has been selective in India, and its first buyout deal. It invested in India's largest healthcare chain Apollo in 2007 and exited with three-fold returns. In early 2011, Apax Partners invested over $350 million in Nasdaq-listed information technology firm iGate to back its acquisition of Patni Computers.
"Over the past decade, we have built GlobalLogic into a 6,600 person-strong global innovation engine," GlobalLogic CEO Shashank Samant said. "The decision to bring in Apax as an investor is based on the need to continue and grow the momentum and market share that we have gained and will allow us to significantly increase our global reach for clients in key markets."
Royal Bank of Canada and Credit Suisse acted as financial advisors to Apax Partners and will provide financing for the transaction. JP Morgan Securities LLC acted as financial advisor to GlobalLogic. Kirkland & Ellis LLP provided legal advice and KPMG provided accounting and tax advice to Apax Partners. Hogan Lovells US LLP provided legal advice to GlobalLogic.
(Edited by Joby Puthuparampil Johnson)