Networking major Hewlett Packard Enterprise (HPE) has decided to sell its 60.5 percent stake in IT services provider Mphasis to Blackstone India.
This deal represents the largest acquisition by Blackstone in India and is the largest private equity transaction in India.
Blackstone will pay INR 430 per share to HPE for its 60.5 percent stake.
Blackstone will also make an open offer to purchase additional 26 percent stake in Mphasis. The total deal size will be approximately $825 million – $1.1 billion.
HPE and Blackstone have agreed on the terms of a Master Services Agreement (MSA) which HPE proposes to sign with Mphasis, post approval by Mphasis’ Board of Directors and shareholders. The duration of the MSA is five years with three automatic renewals of two years each.
Under this MSA, HPE has proposed to commit a minimum revenue amount escalating year over year and totaling $990 million over the next five years. Also, Mphasis will be included in HPE’s Preferred Provider Program opening up significant additional revenue opportunities.
Mphasis’ last twelve months revenue as of December 31, 2015 was $904 million and Profit after Tax was $104 million. It has expertise in Banking, Financial Services and Insurance (BFSI) sector and strong portfolio focus on New Generation Services including Digital solutions.
Mphasis serves customers across the globe including 6 top global banks, 11 out of 15 top mortgage lenders, and 3 top global insurance companies. The company has roughly 24,000 employees across 16 countries.