India’s Mphasis Said To Head For $3B Buyout

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A group of American private equity firms, namely Brookfield, Carlyle, Bain Capital, and Permira, have initiated due diligence for a deal to acquire Mphasis, the publicly-traded Indian IT services company, the Indian news outlet Economic Times reports, citing “people aware of the matter”.

According to the Economic Times, the four aforementioned private equity firms are competing with each other for a final deal to buy out Mphasis, which is itself controlled by the American private equity firm Blackstone Group.

The publicly-traded Mphasis is being pursued for a $3 billion buyout that would mark Blackstone’s biggest exit in India and notably a landmark deal for an American private equity firm in the Indian technology sector, the Economic Times reports.

Mphasis has an ownership history that has involved several American firms. First, the IT company Electronic Data Systems (EDS) bought a controlling stake in Mphasis in 2006 and itself then sold to the tech giant Hewlett-Packard (HP), which then assumed control of its stake in Mphasis.

In 2016, Blackstone bought a controlling stake in Mphasis from HP in a $1.1 billion deal. All the while between these sales, Mphasis remained publicly-traded and has seen its share price soar high since Blackstone bought a controlling stake in it. 

Over the past year, Mphasis’s share price has risen nearly 70% and given Blackstone a lucrative return on paper that now appears to be getting solidified given the reports of an impending buyout.

Mphasis represents Blackstone’s biggest investment in India and now seems set to turn a lucrative profit for the American private equity giant which manages nearly $600 billion of assets. With that, Blackstone could be further enticed to invest in India and make more big deals in the country.

According to the Economic Times, Mphasis is likely headed for a $3 billion buyout, a price that’ll mark one of the biggest foreign acquisition deals in India’s technology industry and one of the landmark deals of 2021.

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