Renuka Ramnath-led private equity firm Multiple PE has emerged as the lead contender to pick up a controlling stake in Kerala-based global IT services firm QBurst, three persons in the know told Moneycontrol on the condition of anonymity.
"The process has been going on for a few months and now Multiples PE and the founders of QBurst are in advanced stage negotiations for the proposed transaction," said one of the persons above, adding that the talks may or may not necessarily fructify into an eventual transaction.
"The QBurst founders are open to diluting a majority stake, and currently, a valuation of around $300 million is being discussed for the entire firm. They are not looking at a full exit and are keen to retain a minority position," a second person elaborated.
A third person also confirmed the founder's plans of offloading a majority stake and said that Multiples PE was currently ahead of other suitors. Incidentally, in May, DealStreetAsia had reported that Swedish investment major EQT was in advanced discussions to make an investment in QBurst.
Email queries and reminders to QBurst founders Prathapan Sethu and Binu Dasappan were left unanswered at the time of publishing this article. Numerous attempts to reach the firm's office's failed. When contacted, Multiples PE declined to comment as a matter of policy.
The existing portfolio of Multiples PE consists of players such as AI and Big Data firm Quantiphi, HR technology and services company PeopleStrong, SaaS platform MoEngage, and fintech Niyo.
QBurst is a global product development and consulting company offering cognitive solutions and custom software development services for micro to large enterprises, according to it's website.
"We are an end -to-end solution provider and R&D partner for many businesses," the firm's website adds. It has a presence in several countries, including USA, Canada, South Africa, Germany, Sweden, Dubai, Japan, Singapore and Australia.
Offering services like cloud enablement, data and AI and digitilization, QBurst's clients range from Airtel, AstraZeneca and Mercedes Benz to Dell, National Geographic and Peugeot. The firm has partnered with Amazon, Salesforce, Google and Microsoft, as per its website.
M&A action in IT services segment
Deal activity in the IT and tech services segment has picked up in recent months. On September 9, private equity fund ChrysCapital group signed a definitive agreement to sell a controlling beneficial interest in GeBBS Healthcare Solutions Private Limited, a provider of revenue cycle management (RCM) services and risk adjustment solutions, to global investment firm EQT.
On September 5, Moneycontrol had reported that EQT had edged ahead of rival suitor HillHouse in the race for acquiring GeBBS Healthcare.
Earlier in the month, Bloomberg had reported the sale plans of EQT's portfolio firm AGS Health, which provides revenue cycle management services to healthcare firms.
Incidentally, EQT, is simultaneously eyeing an IPO of Sagility India (earlier called Hinduja Global Solutions), a technology-enabled healthcare focused solutions and services provider. Sagility India filed its draft red herring prospectus with SEBI in July. EQT had acquired Sagility from the Hinduja Group for $1.2 billion in 2021.
In recent deals in the BPO segment, KKR announced the acquisition of a “significant minority stake” in Infinx Healthcare, an artificial intelligence (AI) driven healthcare business process outsourcing (BPO) company. Sources pegged the deal value at around $150 million.
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