Mphasis spurts as Blackstone, ADIA, UC Investments to acquire controlling stake

Mphasis jumped 4.04% to Rs 1766.25 as private equity funds managed by Blackstone Group Inc. have entered into definitive agreements to acquire a majority stake in the Indian IT outsourcing services provider.

A wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA), UC Investments (Office of the Chief Investment Officer of The Regents, University of California) and others will co-invest along with Blackstone.

This transaction has triggered a mandatory open offer for the purchase of up to 26% additional shares of Mphasis from the public shareholders.

BCP Topco IX (the acquirer) along with Blackstone Capital Partners Asia NQ L.P. (PAC 1) and Blackstone Capital Partners (CYM) VIII AIV - F L.P. (PAC 2) have announced an open offer for acquisition of up to 4,92,63,203 equity shares from the public shareholders of Mphasis, representing 26% of the expanded voting share capital, at a price of Rs 1,677.16 per equity share aggregating to total consideration of Rs 8,262.22 crore payable in cash.

Amit Dixit, Co-Head of Asia Acquisitions and Head of India for Blackstone Private Equity, said: "Information technology and software services have been strong sectors for value creation for the last two decades. Mphasis is backed by strong secular tailwinds as global enterprises increasingly migrate to the cloud. The company is exceptionally well-positioned given a terrific management team, strong order backlog, long-term strategic customer base, deep domain expertise in financial services, and a world-class suite of cloud and digital offerings. This investment enables us to continue creating value for the long term with continuity in the management team and the board, and provide additional resources to further accelerate the company's growth momentum. We are grateful to Mphasis' customers, investors, employees and board for their continued support."

Blackstone bought a 60.5% stake in Mphasis from Hewlett Packard Enterprise Co. in 2016 at Rs 430 per share.

As on 31 March 2021, Marble II, a unit owned by PE firm Blackstone, held 56.03% stake in Mphasis.

Mphasis applies next-generation technology to help enterprises transform businesses globally. The IT company reported 8.8% rise in consolidated net profit to Rs 325.53 crore on a 1.6% increase in net sales to Rs 2474.39 crore in Q3 FY21 over Q2 FY21.

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