Bain, GIC & Advent buy out Warburg Pincus, others in QuEST for $350M

Bain Capital, GIC and Advent International have invested approximately $350 million (Rs 2,400 crore) to pick minority stakes in global engineering solutions provider QuEST Global Services Pte from Warburg Pincus and other existing shareholders, as per a statement.

Ajit Prabhu, co-founder, chairman and CEO of QuEST, said, "This investment by three of the most respected global investors reflects the progress we are making. It also crystallises the value we have created for our shareholders and employees who have placed their belief in us and partnered with us in this journey."

QuEST's services include mechanical, embedded and engineering software offerings across high-tech industries: aerospace, transportation, energy and medical devices.

"We are partnering with QuEST because of the differentiated business platform and distinctive culture of the company. QuEST has demonstrated the ability to scale accounts in a fragmented industry by becoming the core engineering partner to most of the top global firms in its target industries," said Pawan Singh, managing director of Bain Capital Private Equity.

Bain had participated in a few such large transactions with GIC in the past when it invested in Genpact and Hero MotoCorp.

"GIC is confident of QuEST's capability to provide engineering services across all stages of the product development life cycle. QuEST's local-global approach enables its clients to achieve cost-effective solutions for their complex engineering needs," said Maverick Wong, head, Asia private equity at GIC. GIC is Singapore's sovereign wealth fund.

Shweta Jalan, managing director at Advent International, said the PE firm was impressed by the depth of its engineering expertise as well as the diverse industries and emerging technologies in which QuEST is helping its customers.

“We believe the ESO space will continue to see significant growth and innovation in the years ahead, and we look forward to working with QuEST's management team and our co-investors to capture these opportunities,” she added.

Advent, too, last year partnered with GIC's sister firm Temasek, another Singapore government investment firm, to pick a large stake in Crompton Greaves' consumer products unit.

Meanwhile, this marks another profitable exit for Warburg Pincus that sold its shares in diagnostics firm Metropolis last year.

Warburg Pincus had invested $75 million in the company in 2010. Interestingly, Bain was also a suitor for the firm back then besides KKR.

Although QuEST did not share details of how much money went to which shareholder and if the deal also involves some primary issue of shares with money coming into the firm, Warburg Pincus is believed to have multiplied the value of its original investment.

Credit Suisse is the sole financial advisor to QuEST on this transaction.

QuEST was co-founded by Ajit Prabhu and Aravind Melligeri in 1997. Through a mix of organic expansion and acquisitions, it expanded consistently over time starting with integration of Lexical Engineering barely a year after starting up.

Later it bought Spanish firm Interface, acquired the engineering arm of GKN Aerospace in UK and Cincinnati-based ASE.

Some of its more recent integrations include the Houston-based Beeken, which fortified its oil and gas capabilities, NeST Software that enabled its foray into medical devices and other emerging industries and German automotive engineering services organisation EDF.

The company has nine delivery centres with 7,300 employees globally.

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