Apax Partners, a private equity firm, has acquired GlobalLogic, an IT outsourcing company, for $420 million.
Times of India on Wednesday reported that the Rs 2,578 crore deal makes it the biggest India exit deal for a clutch of venture capitalists this year.
For Apax, this is the second big deal in India’s $108 billion outsourcing industry. Two years ago, the private equity firm backed iGate to buyout Patni Computer for $1.2 billion.
GlobalLogic is founded by 4 IITians including Rajul Garg, Sanjay Singh, Manoj Agarwala and Tarun Upadhyay.
California-based GlobalLogic competes with Symphony Technology and Persistent Systems in the outsourced product development or research and development space.
GlobalLogic has large development centres in India, Ukraine and Argentina.
“The decision to bring in Apax as an investor is based on continuing and growing the momentum and market share that we’ve gained and will allow us to significantly increase our global reach for clients in key markets. Apax is the ideal partner to help us do this,” said GlobalLogic CEO Shashank Samant.
GlobalLogic reported around $250 million in sales.
Existing investors, which exited during the transaction, include New Enterprise Associates, Sequoia Capital, Westbridge Capital, Goldman Sachs, and New Atlantic Ventures. Westbridge, which invested in the company in 2006, is the largest shareholder in the company.
GlobalLogic, with 6,500 employees, will operate as an independent entity and not merged with iGate. The current CEO Shashank Samant will continue running the business.
The agreement will further enable GlobalLogic to deliver design and engineering solutions to companies worldwide, and continue as a leading provider of software R&D services.
“We are pleased to see GlobalLogic take this next step in expanding its reach in product design and engineering around the world. As the largest and an early shareholder in GlobalLogic since 2006, it has been exciting to be a part of GlobalLogic’s journey to this point, and we look forward to seeing GlobalLogic continue its growth and success in the future,” said Sumir Chadha, managing director, WestBridge Capital.
Royal Bank of Canada and Credit Suisse acted as financial advisors to Apax and will provide financing for the transaction.
GlobalLogic is focused on product development innovation. GlobalLogic leverages its expertise in design and engineering to build partnerships with market-defining businesses and technology leaders who want to make amazing products, discover new revenue opportunities and accelerate time to market.