HOV Services to sell its stake in SourceHOV for $95 million

HOV Services has a shareholding of 26.1% in SourceHOV through its US subsidiary HOVS LLC

BSE listed business process services firm HOV Services stock hit the upper circuit as the company announced its plans to sell its entire stake in SourceHOV. HOV Services is selling its stake in US-based SourceHOV to HandsOn Fund 4 for $95 million.

HOV Services stock was up 20 per cent as it touched Rs 152.55 per share on the BSE.

HOV Services has a shareholding of 26.1 per cent in SourceHOV through its US subsidiary HOVS LLC. The company in its filing said that it has received an offer of purchase from US-based buyout firm HandsOn Fund 4.

Attempts made to get in touch with Sunil Rajadhyaksha, member of board and management failed.

The company in a filing to the exchanges also said that SourceHOV will merge with US-based BancTech Group Corporation. BancTech is a portfolio company of HandsOn Fund 4.

As part of the deal, BancTec shareholders will get shares in SourceHOV. In the filing the company also mentioned that SourceHOV will use a new $1.1 billion credit facility to refinance existing indebtedness, redeem certain existing SourceHOV equity holders and provide additional working capital.

The merger of BancTech and SourceHOV, according to the company, will create one of the largest transaction processing solutions firm worldwide.

Both SourceHOV and BancTec are headquartered in Dallas, Texas, and the combined company is projected to have annual revenues in excess of $900 million.

SourceHOV was formed three years ago with the merger of HOV Services LLC, an indirect subsidiary of HOVS, with Sourcecorp, a portfolio company of Apollo Global.

In March 2013, Citi venture capital investment had acquired the stake of Apollo Global Management and other minority share holders in SourceHOV.

HOV Services operates as a hybrid between investment and diversified services corporation.