Blackstone-backed BPO firm Intelenet Global will have to shell out as much as Rs 44.5 crore ($9.7 million) to take outsourcing firm Sparsh BPO Services Ltd private. The discovered price or the exit price in the reverse book building process, after shareholders tendered their shares in the delisting offer, is Rs 110 per share as compared to the minimum or floor price set at Rs 68.6 per share.
Intelenet had offered to buy out 25.06% it did not own in the stock exchange-listed Sparsh BPO Services Ltd. The floor price was about 25% lower than the (then) market price while the delisting price is just about 3.5% more than the closing price of Sparsh BPO on Friday. Earlier, Intelenet had offered to buy the shares at Rs 80 each.
The delisting offer opened January 31 and closed on February 4. The merchant bankers have disclosed that Intelenet will acquire all shares tendered through valid bids at or below the exit price and on completion of the process its shareholding would exceed the minimum number equity shares required for the delisting and so the offer has been successful.
Minority stakeholders who bid at a price higher than the exit price or have not decided to tender their shares in the offer will have time till another year(after delisting of the scrip from the stock exchange) to accept the exit price to tender their shares.
This came close on the heels of Barclays announcing that it is picking a 12% stake in Intelenet, marking a return to the company as an investor. The British Bank, that is already one of the largest clients of the firm, is said to be picking fresh shares in SKR BPO Services.
Barclays and Housing Development Finance Corp (HDFC) had sold their stake to Blackstone in a management buyout for $200 million and have bought back into the company. Blackstone held 80% stake while the remaining 20% was with the management after the MBO was concluded in 2007. Post Barclays transaction, Blackstone will own 66.25% while the management will have a 16.5% holding. HDFC now holds a 4.5% stake.
HDFC along with Tata Consulting Services (TCS) had set up Intelenet as a 50:50 joint venture back in 2000. But HDFC acquired TCS 50% stake in Intelenet for Rs 161 crore in July 2004 and sold it a month later to Barclays for Rs 164 crore.
This will be the second such deal where a private equity firm or a PE backed firm is taking a company private, a phenomena which is quite common in the developed markets but largely absent in India. Actis is in the process of acquiring a part of the business of its own portfolio company Halonix.
While Halonix is a listed company, Actis is buying out the low margin general lighting business leaving the listed firm with profitable automotive lighting business. The strategy behind this could be to improve operations and make it a financially stronger firm at a private level before looking to sell it out to a strategic buyer in the future.