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August 3, 2012
Transaction Analysis
Bain Capital to acquire 30% stake in Genpact
 

Financial Overview:

  • Transaction Value: $1 billion
  • Implied Enterprise Value: $3.24 billion
  • EV/Revenue: 1.7x
  • EV/EBITDA: 10.5x

 

 martinwolf Analysis:

  • Bain Capital, LLC on August 1 announced that it had entered into an agreement to acquire a 30.49% stake in Genpact Ltd. (NYSE:G) from General Atlantic LLC and Oak Hill Capital Partners.
  • This deal provides General Atlantic and Oak Hill with a good opportunity to cash in on their gains over the approximately eight years that they have held a part of the company - they originally purchased 60% from GE, its former parent company, for $500 million in 2004.
  • Bain has been acquisitive in Asia recently, having announced a deal to buy a 50% stake in a Japanese shopping channel for $1.3 billion last month.
  • The growth of Genpact over the past eight years is exemplified by the two different implied enterprise values- $833 million for the 2004 transaction and $3.24 billion in today's transaction.
  • The timing of this transaction is beneficial to all parties-Genpact is coming off Wednesday's announcement of a strong second quarter, with profits rising to $61.1 million over one year ago.
  • Genpact gains the resources of Bain Capital, and with them should be able to continue its significant growth.
  • The deal, and the path that Genpact took before ending up at this point, illustrates the changing nature of the global economy.
  • Originally, Genpact was created as GE Capital International Services, the outsourcing arm of GE (still one of Genpact's largest sources of revenue)
  • Genpact has historically been the king of BPO in India, and has recently looked to expand its specialty into higher value it services with the acquisition of Headstrong, an American consulting and IT services company as demand for BPO firms has declined among many strategic investors.
  • With Indian firms increasingly look to move beyond outsourcing, as margins are eroding rapidly without any promise for returning, we are seeing the effects of an increasingly interlinked global economy, where assets may be in in one country but customers can be found across the globe.
  • Large private equity firms are capable of creating value, as their funds enable them to quickly consolidate companies in an economy where scale matters.

 

Please click here to read the press release.

 

martinwolf was not the adviser in this transaction.

 

To learn more about martinwolf contact Matthew Putzulu at mputzulu@martinwolf.com.  

About martinwolf    

 

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With offices in San Francisco and Bangalore, India, martinwolf is a leading middle market M&A Advisory focused on companies with services-based business models. Since 1997, our team has completed more than 115 transactions in six countries. We are a five-year member of the Merrill Lynch PS Referral Network, and were selected as ICICI Bank's (India's leading private bank) exclusive strategic partner for acquiring U.S. IT companies. martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com.

   

June 15, 2012

glendonTodd Capital LLC announced that it acquired Aztec Systems, a leading provider of enterprise technology solutions to hundreds of U.S. middle-market companies. Aztec was represented by martinwolf in this transaction. Aztec, a member of Microsoft's Presidents Club, was recently ranked 27th in revenue on Bob Scott's 2012 Top 100 VARS list and serves more than 700 middle-market clients. Terms of the transaction were not disclosed. Please click here to view the announcement.

 

December 1, 2011

Softchoice Corporation (TSX: SO) announced it has it has fulfilled its regulatory requirements under the Competition Act and has now completed the acquisition of substantially all of the assets of UNIS LUMIN, one of Canada's most highly regarded Cisco networking and managed services companies. Softchoice was represented by martinwolf. The acquisition strengthens Softchoice's professional services capabilities while providing the technology foundation to support the Company's future cloud offerings.

Please click here to view the announcement.   

 

September 30, 2011

SPS, a leading Unified Communications Provider, announced that Court Square Partners has made an investment in the company. martinwolf advised SPS in this transaction. SPS is a premier unified communication services integrator, ranked 131 on the 2011 VAR 500 list with 2010 sales of $143 million. Court Square is a $4B+ New York-based PE Group, with more than 150 lifetime investments. Please click here to view the announcement. 

 

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