CVC Capital, Warburg Pincus in fray for digital tech services firm TO THE NEW

Binding bids are expected in the next 2-3 weeks. The expectation is that the deal should value the company in the range of $750 - $850 million

A clutch of around four bidders, including private equity funds and strategic players, have been shortlisted for the next stage in the ongoing sale of a majority stake in digital technology services company TO THE NEW, multiple industry sources in the know told Moneycontrol.

"CVC Capital, Warburg Pincus and two global strategic players have been picked after the initial round of bids for the due diligence stage," one of the persons in the know told Moneycontrol.

Singapore-headquartered TO THE NEW was established by four Indian entrepreneurs in 2008.

"The firm plays in the very attractive segment of cloud services and a lot of players are looking to invest and acquire capabilities in this space. The founders feel if they align with someone, the firm can be on a higher growth trajectory," a second person told Moneycontrol.

According to a third person familiar with ongoing negotiations: "Binding bids are expected in the next 2-3 weeks. The expectation is that the deal should value the company in the range of $750 - $850 million, though that figure may vary depending on diligence and final stage negotiations."

"For a PE player, this represents a platform, behind which they can do bolt-on acquisitions. Lincoln International is the sell-side advisor on the deal," a fourth person elaborated.

All the four persons above spoke to Moneycontrol on the condition of anonymity.

In response to an email query, TO THE NEW Co-Founder and CEO Deepak Mittal said: "We would refrain from commenting on this."

Queries sent to CVC Capital, Warburg Pincus and Lincoln International were left unanswered at the time of publishing this article.

Know more about the target: TO THE NEW

TO THE NEW provides product engineering, Cloud and FinOps services to enterprises, SaaS (Software as a Service), ISVs (independent software vendors) and consumer tech companies.

As per its website, the firm has more than 2,500 employees, spread across six locations - Singapore, New Delhi, Dehradun, Dubai, New Jersey and Sydney catering to over 300 customers in the America's, EMEA region (Europe, Middle East and Africa), APAC ( Asia Pacific Region) and India.

Its Indian customers include IndiGo, HDFC Mutual Fund, Tata Play, Maruti Suzuki, Fortis, SonyLiv, Zepto and Lenskart, according to the website.

According to CEO Mittal's Linkedin profile, "TO THE NEW also leverages its deep partnership with all the leading hyperscalers like AWS (Premier Partner), Azure, and GCP to provide end-to-end cloud professional and managed services to its customers.”

The firm has a cloud cost optimization and FinOps solution called Cloud Keeper which claims to offer instant and guaranteed savings of upto 25 percent on the entire cloud bill.

Private equity firms have been active in the IT and technology services space in 2023.

In October, Warburg Pincus announced an investment in healthcare services outsourcing firm Everise as part of which existing investor Everstone Group made an exit.

In May, private equity firm Apax Partners acquired travel and logistics SaaS firm IBS Software for $450 million.