Even though the deal value was not disclosed, people in the know told ET, Apax will be buying 100% of the company for $800 to 900 million. As part of this transaction, Chryscapital that currently on 70% will be selling out entirely along with the founders and some of the senior professional management who also had equity interests in the company, they add. Apax is promoting the company’s COO Ayan Mukherjee to become the new CEO.
The transaction is subject to customary closing conditions and is expected to close in Q3 2021.
In 2015, ChrysCapital had invested $63 million to pick the stake in the California-headquartered Infogain. In 2016, Infogain acquired BlueStar Infotech’s IT services business. It also bought Silicus Technologies and Revel Consulting in 2019 and acquired Absolute Data and Analytics in 2020.
Kapil Nanda established Infogain in 1990, after working at Intel where he was instrumental in the company’s transition to microprocessor technology.
Headquartered in Los Gatos, California, Infogain provides human-centered digital platform engineering services to its customers. With a team of 5,000 globally, Infogain serves companies in the travel, healthcare, retail/consumer packaged goods (CPG), insurance, telecom, and tech industries, supporting them in their artificial intelligence, experience design and cloud journey, using advanced software technologies.
Apax, in partnership with Infogain’s management team, will look to continue and accelerate Infogain’s journey as a market leading digital transformation partner to its customers, added the statement.
“Apax’s experience, track record and deep knowledge of the industry will help supercharge our growth, organically and through new strategic acquisitions,” said Ayan Mukerji, CEO of Infogain.
“Digital engineering and technological excellence continue to be key competitive advantages across industries, and Infogain, with its platform strategy and highly talented team, is exceptionally well placed to help drive innovation and support its customers in developing differentiated human-centered solutions,” said Shashank Singh, Partner at Apax.
Credit Suisse was the advisor in the transaction.
Digital transformation continues to be a priority for organizations and only got accelerated during the pandemic that has only expanded demand for new data-driven business models, customer experiences, and connected ecosystems. However, several organizations lack the knowledge and experience to design and deploy new digital platforms, believe industry experts. Companies are also challenged by the shortage of the skills required to build digital-native products, and to design new interaction models and digital experiences, such as new digital ways of shopping or new models for delivering and receiving healthcare. Against this backdrop, the demand for players like Infogain services is growing rapidly, and the combined company has greater access to this massive market opportunity.
This is the second buyout in IT space in India by Apax in the last one year. The fund had acquired the software products business of 3i Infotech Ltd in December 2020 for about Rs1000 crore. The PE fund has been historically bullish on tech services and software having bought out Patni Computers, Global Logic as well as investments in Zensar Technologies.
Globally, Apax has previously backed software companies such as Duck Creek, MyCase, Eci and Lexitas, Thought works, EVRY.
“There has been a significant flow of PE to PE deals in IT/ ITES space. Under the PE investors, mid-sized IT/ITES companies see a significant growth and turned out to be a good buyout opportunity for the global funds,” said Ajit Deshmukh – Managing Director – Equirus Capital, an investment bank.
The demand from the PE industry is higher for IT/ITES companies with a presence in India, he added.
In 2019, Apax had acquired a significant minority stake in Fractal Analytics, a global provider of AI, for $200 million.
Apax Partners, which owned half of outsourced product development firm GlobalLogic, had sold its stake to private equity firm Partners Group, valuing the company at over $ 2 billion in 2018.
Apax Partners LLP has raised and advised funds with aggregate commitments of more than $60 billion. The Apax Funds invest in companies across four global sectors of Tech & Telco, Services, Healthcare and Consumer.
Apax has deployed about $3 billion in India since 2007.