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April 2, 2014
MW Transaction Analysis  

Blackstone Completes Privatization of Pactera

Financial Overview
  • Transaction Size:                                                   $553.3 million
  • Enterprise Value:                                                   $452.1 million
  • EV/LTM Revenue:                                                                   0.7x
  • EV/LTM EBITDA:                                                                   11.0x

Transaction Facts  

  • Pactera Technology International Ltd. (NasdaqGS:PACT) announced on March 27, 2014 that it had completed a merger with Blackstone Signapore Pte Ltd., GGV Capital and the Pactera management.
  • The transaction was initially announced at a higher price on May 20, 2013, but the arrangements were not definitive until Oct. 17, 2013 as a result of Pactera reporting weak results and lowering its 2013 revenue and profit outlook. Furthermore, regulatory issues associated with the size and scope of the transaction resulted in a long closure process.
  • Pactera initially formed as a result of a merger of equals between VanceInfo Technologies, Inc. and Hisoft Technology International, Ltd. designed to enable the combined company to better compete internationally as the largest China-based offshore IT services provider by revenue.

IT Companies Look to Private Equity to Make Transitions     

  • Higher Margins, Higher Priority: As we are seeing with many companies in this space such as Camelot and iSoftstone, changing market demand is forcing a transition toward higher margin consulting. Partnering with a private equity firm enables Pactera and similar companies to undergo this transition away from public scrutiny, without having to produce quarterly reports.
  • Follow the Leader: While not as large as their Indian competitors, Pactera and iSoftstone are major players in the Chinese IT space - and we expect their smaller competitors to undergo similar strategies.
  • Prime Time: Chinese companies are valued lower in U.S. markets than they are in Chinese markets due to lingering suspicions over accounting practices, furthering the case for privatization as an increasingly attractive option for growth and value creation. This is especially true for companies that used reverse takeovers to enter the U.S. market and have been overwhelmed by the compliance costs associated with a U.S. listing.
  • Next Steps: We believe that Pactera's managers and their new private equity partners will actively pursue acquisition opportunities to increase their scale and more effectively compete on the global stage. Once this is accomplished, we expect them to re-list and provide a new option for investors looking to buy into the sector.

For more information, read the press release here.


 martinwolf was not the advisor in this transaction. 

About martinwolf    


             San Francisco, CA                                                Bangalore, India

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 nine countries. We are a five-year member of the Merrill Lynch PS Referral Network, and are a strategic partner of the Enterprise Advisory department of CICC, China's first joint-venture investment bank.


The firm is also a presenting sponsor of the Global IT M&A Forum.   


martinwolf is a member of FINRA and SIPC. For more information, visit  


To learn more about martinwolf, contact Matthew Putzulu at


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