Carlyle to acquire minority stake in Quest Global at $2 bn valuation

Sources say PE major could pick up 28% stake for $500 mn

US private equity firm Carlyle will acquire a “significant minority stake” in Singapore-headquartered product engineering services company Quest Global as part of a definitive partnership agreement, which will lead to the exit of existing investors Bain Capital and Advent International.

Equity for this transaction will come from funds managed and advised by entities affiliated with Carlyle Asia Partners. Quest Global will repurchase its shares, and Chairman and Chief Executive Officer Ajit Prabhu will acquire an additional stake in the company.

The quantum of stake to be acquired by Carlyle and Prabhu was not disclosed in the announcement, but sources said Carlyle Asia Partners would invest about $500 million to acquire a 28 per cent stake in Quest Global at a valuation of nearly $2 billion.

“The partnership approach taken for this transaction demonstrates Quest Global’s commitment to the long-term success of its business strategy and its employees,” Quest said on Tuesday.

Amit Jain, managing director and head of Carlyle India Advisors, said, “Carlyle was the first early-stage private equity investor in Quest Global, and we are proud to partner again…Quest Global is well poised to benefit from the growing focus on product innovation, digital engineering, embedded systems, increased outsourcing, and disruptive technology advancements across industries. We look forward to working closely with Quest’s management team while leveraging Carlyle’s deep sector expertise and global network to help the company expand its global leadership in the ER&D space.”

Driven by the demand for engineering services, Quest Global aims to double its India headcount to 20,000 in the next 3-5 years. Currently, it has about 17,500 employees globally, with India accounting for about 10,000.

“It was a great value-added partnership with Carlyle the first time around, and I look forward to working with Carlyle again, to propel us in the journey ahead. Together, I am confident, we will deliver on our mutual commitment to provide cutting-edge engineering solutions to our clients around the world while preserving our entrepreneurial culture,” Prabhu told Business Standard.

Barclays, JPMorgan, BNP Paribas, and Latham & Watkins served as advisers to Quest Global. Deutsche Bank, Clifford Chance, KPMG, and Trilegal advised Carlyle.

Carlyle’s buyout funds, including Carlyle Asia Partners, invested over $35 billion of equity in more than 280 deals globally as of June 30, with Asia accounting for $5.6 billion.

Quest Global snapshot: 
 

Headquartered in Singapore, present across 17 countries, with 67 global delivery centers
 

17,500+ employees globally, 10,000 employees in India
 

Aims to double headcount in 3-5 years, globally and in India 
 

Focussed on aerospace & defense, automotive, energy, hi-tech, healthcare, medical devices, rail, and semiconductor industries

In 2022, Quest acquired Adept, a Bengaluru-based product design firm with capabilities in semiconductor, automotive, and hi-tech verticals