PE duo puts Minacs on the block at $500 million

Minacs provides technology outsourcing and business process outsourcing with a workforce of about 21,000 across its 35 offices

Capital Square Partners and CX Partners, the home-grown private equity duo that bought BPO firm Minacs at $260 million two years back from Aditya Birla Nuvo, and are now in talks with potential buyers to sell it at near double valuation of $500 million.

"In the last two years PE owners have been able to improve operating margin of the company by about 500 basis points (bps). This has significantly helped boost the firm's valuation," says an executive at one of the PE firms who did not wish to be identified. Minacs now has annual earnings before interest, taxes, depreciation and amortisation (Ebitda) of about $55 million, another person familiar with company's affairs said.

Minacs, which traces its roots back to 1981, provides technology outsourcing and business process outsourcing with a workforce of about 21,000 across its 35 offices. The company was formed in its current state in 2007, after Kumar Mangalam Birla merged local outsourcing company TransWorks Information Services with North American customer relationship management firm Minacs Worldwide.

Minacs has headquarters in Farmington Hills, Michigan, as well as Oshawa, Ontario, and Bengaluru. It also has offices in Germany, Hungary, Jamaica, Mexico, the Philippines and the UK, according to its website. The company said in November that it opened a second site in Richmond, in the US, that can accommodate around 800 employees to support a large US health care provider.

CX Partners, founded in 2009, manages about $500 million of assets. Its investments include Barbeque Nation Hospitality, which runs a chain of grilled meat restaurants in India, as well as generic drugmaker Natco Pharma and Karur Vysya Bank. Singapore-based Capital Square Partners has bought stakes in CSS Corp, a provider of technology support services, and data analytics firm Ananto.

key takeaways

| Minacs was purchased for $260 mn 2 years back from Aditya Birla Nuvo
| Operating margin of the company has improved by about 500 basis points in the period
| Minacs has annual Ebitda of about $55 million

| Minacs has a workforce of about 21,000 across its 35 offices
| The company said in November that it opened a second site in the US that can accommodate around 800 employees to support a large US health care provider