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News >> Technology >>
Big firms in race for stake in MphasiS
By agencies
|
Tuesday, 10 May 2005, 19:30 IST
MUMBAI: Over a dozen companies, including Indian and foreign IT companies and investors are bidding to acquire Barings 36 percent stake in MphasiS BFL, a mid tier software company.
There are three categories of bidders. The first category of bidders is the Indian IT services companies like TCS and Wipro. The second category is made up of European and U.S. IT companies like IBM, EDS, Atos Origin and Cap Gemini E&Y. The third category comprises of private equity firms like Temasek, Warburg Pincus, Blackstone and CSFBs private equity arm.
A formal bidding process will start in a week or two. Merchant banking sources say that the bids are likely to be between 
300 to 400 per share.
The expectation of the higher end of the valuation range is based on the current attention the BPO industry is getting globally. Msource contributes a substantial portion of the MphasiS revenues, which is a BPO operations unit.
A crucial issue in the bid process is the management continuity for MphasiS, and a possible roadmap for the existing management team. MphasiS is run by a close-knit team of ex-Citibank employees who would like to continue holding sway.
A few months ago, the senior management of MphasiS held discussions with a large Indian IT company. But the talks did not reach any conclusion, and now a formal bidding process has been initiated with the appointment of an investment banker. Foreign IT majors are also expected to enter the acquisition process, with the appointment of Stanchart as advisors to the transaction
The valuation of the MphasiS will be based on the future strategy for growth adopted by the company.
The company has been making regular acquisitions to maintain its growth. The company has a fairly aggressive culture that is evident in the five acquisitions that it has made in the last two years. In February, MphasiS acquired Princeton Consulting for $14 million, which was followed immediately by the acquisition of Eldoradao for $16.5 million in March. Earlier, the company acquired Kshema Technologies, Onida Infotech and Navion in China.
300 to 400 per share.
The expectation of the higher end of the valuation range is based on the current attention the BPO industry is getting globally. Msource contributes a substantial portion of the MphasiS revenues, which is a BPO operations unit.
A crucial issue in the bid process is the management continuity for MphasiS, and a possible roadmap for the existing management team. MphasiS is run by a close-knit team of ex-Citibank employees who would like to continue holding sway.
A few months ago, the senior management of MphasiS held discussions with a large Indian IT company. But the talks did not reach any conclusion, and now a formal bidding process has been initiated with the appointment of an investment banker. Foreign IT majors are also expected to enter the acquisition process, with the appointment of Stanchart as advisors to the transaction
The valuation of the MphasiS will be based on the future strategy for growth adopted by the company.
The company has been making regular acquisitions to maintain its growth. The company has a fairly aggressive culture that is evident in the five acquisitions that it has made in the last two years. In February, MphasiS acquired Princeton Consulting for $14 million, which was followed immediately by the acquisition of Eldoradao for $16.5 million in March. Earlier, the company acquired Kshema Technologies, Onida Infotech and Navion in China.