Private equity investors are playing a key role in the consolidation of information technology (IT) services and the business process outsourcing (BPO) sector. According to the Business Standard there have been five private equity deals worth USD1.13 billion this year. This is a significant rise from 2012 and 2011's transactions per year worth, which were a little over USD1.12 billion.
A few more big ticket deals are to be expected in the coming years as the BPO sector eyes a USD50 billion revenue by 2020, the report said.
This year, private equity firms have bought majority stakes in five companies, including two significant mid-sized players. Global private equity firm Baring Asia invested USD260 million in Hexaware Technologies, while Partners Group committed USD270 million in privately-held CSS Group, Business Standard said.
The report said that even some of the recent exits have also attracted investment firms.
Temasek Holdings and One Equity Partners exited from Apollo Health Street. Temasek reportedly exited with INR51 crore, a return three times its investment. Sutherland Global Services bought the entire Apollo Hospitals BPO stake for an enterprise valuation of INR1,000 crore, Business Standard said.
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