Baring Private Equity Asia has made a proposal to take Hexaware Technologies Ltd private in a transaction that would cost the Hong Kong-based investment firm as much as Rs 3,194 crore ($422 million).
Baring, which held a 62.4% in Hexaware through HT Global IT Solutions Ltd as of March 31, has offered Rs 285 per share to buy the company’s remaining stake, the Indian information technology firm said on Friday.
The offer price is a 9.8% premium to Thursday’s closing price, Hexaware said in a regulatory filing.
The announcement sent Hexaware’s shares up as much as 20% to Rs 311.30 apiece on the BSE in a strong Mumbai market.
Hexaware’s board will discuss the proposal on June 12. It will also appoint a merchant banker for the de-listing.
According to the proposal, the de-listing will provide Baring greater operational flexibility to support Hexaware. It will also help save costs and allow the management to dedicate more time and focus to the company’s business.
Baring PE Asia had acquired a 71% stake in Hexaware in 2013 from the company’s founders, private equity firms General Atlantic and ChrysCapital as well as public shareholders. The PE firm, which provides growth capital to companies, pared its stake in the mid-sized IT company in 2018.
In 2019, Baring PE Asia agreed to acquire a 30% stake in another IT services company, NIIT Technologies Ltd, and later bought more stake via an open offer and stock-market purchases. The buyout firm currently owns a 70.1% stake in NIIT Technologies. Media reports have previously said Baring PE Asia might merge Hexaware and NIIT Technologies, though it has not yet come to pass.
Hexaware has itself been acquisitive. Last year, it bought US-based Mobiquity for $182 million.
Baring PE Asia signed two other IT deals in 2019, acquiring stakes in Citius Tech and AGS Health. It spent close to $2 billion to build exposure to India’s IT services sector in 2019 and was among the most prolific PE investors last year.
The move to take Hexaware private comes months after the Hong Kong-based investor, which operates separately from Baring PE India, closed its seventh buyout fund at $6.5 bn in January 2020.