Race for TA Associates & True North backed Accion Labs: PAG, Carlyle & Apax move to next leg

TA Associates first invested in Accion Labs in 2020. Then in 2022, True North acquired a significant minority stake from TA Associates.

Asia-Pacific focused PAG, US investment giant Carlyle and London based Apax Partners are among the private equity firms which have progressed to the next round in the ongoing sale of a majority stake in digital engineering and innovation services firm Accion Labs, multiple industry sources in the know told Moneycontrol.

The US and India based firm led by CEO Kinesh Doshi is backed by private equity players TA Associates and True North, which are looking to divest their controlling stake.

“Post multiple initial offers, PAG, Carlyle and Apax Partners have been selected for the next stage for now in the process and are currently conducting due diligence. There is strong interest in the asset,” said one of the persons. It was immediately unclear if more bidders had been picked.

Two other persons confirmed the above.

“PAG is hungry for a big deal in this segment in India. Apax Partners already backs Silicon Valley based digital engineering player Infogain while Carlyle backs Hexaware which had a successful listing earlier this year on the domestic bourses,” one of them elaborated.

A fourth person told Moneycontrol, “Though, there is still sufficient time for binding bids, indications are that the proposed transaction may be valued up to $800 mn, but the ask of the sellers is higher.”

Bloomberg, which first reported the sale plans on May 12, indicated a valuation expectation of around $1 bn.

According to a fifth person, “JP Morgan and Avendus Capital are the sell-side advisors on the deal. One can’t rule out the possibility of other private equity suitors entering the race at a later stage.”

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

Email queries to Accion Labs, TA Associates and True North remained unanswered at the time of publishing this article. Reminders have been sent and this article will be updated as soon as we hear from the firms. When contacted, PAG, Carlyle and Apax Partners declined to comment. An immediate response couldn’t be elicited from JP Morgan and Avendus Capital.

TA Associates first invested in Accion Labs in 2020. Then in 2022, True North acquired a significant minority stake from TA Associates.

Know more about Accion Labs

Accion Labs is an AI-first, Platform-led Innovation Engineering company which specializes in building AI-enabled digital solutions that help enterprises modernize how they build, operate and optimize technology, according to its website.

It operates across 23 global locations including Bengaluru, Mumbai, Hyderabad, Pune and Goa with over 4,200 plus employees, including more than 1,000 engineers trained in AI and GenAI.

The focus is on five core areas: Digital Engineering, Cloud and Platform engineering, Data and AI, Enterprise System Automation and Agentic AI, supported by proprietary IP and proven delivery frameworks. Incidentally, earlier this month, Accion Labs acquired NetServ, a product engineering and business intelligence firm.

IT Services: M&A Action

In June, TPG-backed digital engineering Altimetrik acquired SLK Software for $600 mn. The last year has seen considerable M&A action in the IT services space, especially RCM or revenue cycle management.

On May 20, Moneycontrol was the first to report that global private equity giant Blackstone had emerged as the front-runner in the ongoing big-bang $1.1-$1.3 bn sale process of EQT-owned healthcare IT services firm AGS Health

Other deals in the segment include the sale of ChrysCapital owned GeBBS Healthcare to EQT for more than $850 million, the sale of a majority stake in Chennai to Texas based Anurag Jain-led Access Healthcare to New Mountain Capital for about $2bn and the buyout of Goldman Sachs and Everstone backed Omega Healthcare by Ontario Teachers Pension Plan for around $1.8 billion.

FAQs

Who founded Accion Labs?

The founder and CEO Kinesh Doshi, an alumnus of Kellogg School of Management and IIT Delhi, has over 28 years of expertise in the software and tech industry, including IT management, business strategy and execution and has worked earlier with the likes of Deutsche Bank, Citi Bank and Microsoft