After
years of silence, private equity groups are back on the
prowl for Indian IT and BPO companies. Here''s why buyout
firms are back to cutting deals, reports CNBC-TV18.
Flush with cash, private equity firms are gunning for
deals in the Indian IT and BPO industry. After leading
private equity firm Blackstone picked up an 80-per cent
stake in BPO firm Intelenet, rival PE firms like 3i and
Carlyle are said to be in the race for Citigroup''s BPO
arm.
Their
interest in outsourcing. Industry watchers say, is part
of a well drawn out strategy to cash in at both ends.
PE companies cut costs in companies they have invested
in, while making money from the incremental business brought
in to the acquired BPO and IT firms.
Susir Kumar, CEO, Intelenet, said, "One of the reasons
we partnered with Blackstone was because we believe that
if these companies offshore, it will create value for
Blackstone in the US because costs go down, profit goes
up, value goes up. Here when all of these potential businesses
get captured in Intelenet, it creates value again for
Intelenet. So it''s a win-win for them."
Similar views are echoed by IT firm Patni, which has PE
suitors, lined up to pick up a stake in the company. Narendra
K Patni, chairman and CEO, Patni Computers, said, "Private
equity investors control large portfolios of companies
and they have large IT spends that could be outsourced.
So if a private equity investor can combine his equity
purchase and we can relate it to IT spend, it can make
a very valuable contribution to the company."
The
private equity business, at the end of the day, is about
turning around struggling companies and selling them at
a profit. Cutting costs with the help of Indian IT and
BPO is one-way and if PE firms can make money by investing
in them as well, it''s a classic win-win situation.
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