Blackstone, an equity firm based in New York City, America, has given an open offer to Mphasis, an Indian IT-based service firm, to acquire their additional 26% stakes at USD 1.1 Billion on 26th April 2021. In 2016 Blackstone had already achieved 56.4% stakes in Mphasis, valued at USD 1 Billion. Blackstone has also announced plans to bring strategic investors like Abu Dhabi Investment Authority (ADIA), GIC, and UC Investment into Mphasis.
Since having Blackstone as its backbone since September 2016, Mphasis has raised its market value from USD 1.4 Billion to USD 4.5 Billion, 321.45% more. Blackstone has raised Mphasis investment three times within five years. After the technological advancements, Blackstone has claimed to achieve the market value of Mphasis from USD 4.5 Billion to USD 10 Billion in the upcoming four years.
The complete sale will conclude in the upcoming month; this can be expected, depending on the closing conditions and approvals. The blended price of the offer subscription will be between USD 19.40 to USD 20.02. The purchase rumination will be between USD 2 billion to USD 2.8 Billion.
About Blackstone:
It is an alternative investment management firm based in New York, America, to provide financial services. Blackstone was founded in 1985 by Peter G. Peterson and Stephen A. Schwarzman. In the year 2019, they converted themselves into a corporation from a publicly traded partnership. In 2020 their Asset Under Management (AUM) had increased up to USD 619 billion with a total asset of USD 26,269 million. Although as like other businesses, their revenue and net income have suffered due to the ongoing pandemic, they are USD 6.2 billion and USD 2.3 billion, respectively.
About Mphasis:
An IT service company from Bangalore, India, provides architectural guidance, application management services, app development and infrastructure tech. They serve mainly clients from the sectors of logistics, telecom, financial services and tech industries. In 2019 Mphasis was ranked 7th in IT companies in India and 189th by Fortune India 500. In 2016 HP sold the majority of stocks of Mphasis to Blackstone. Since then, Blackstone has been a parent company of Mphasis with 56.12% of stakes in total. Mphasis has total assets of USD 2.2 billion, the revenue of USD 1.1 billion and USD 1.2 billion as its net income in 2020.
What the CEO of Mphasis has said:
“We are gratified to continue our partnership with Blackstone, both as a leading investor as well as our client. We believe Blackstone’s sustained strategic partnership will help the company accelerate its growth and scale new heights. Sovereign and pension fund co-investing is a testimony of long-term commitment and a vote of confidence of a marquee set of shareholders.” – Nitin Rakesh, CEO Mphasis.
What the Head of Blackstone for India has said:
“Information Technology and software services have been strong sectors for value creation for the last two decades. This investment enables us to continue creating value for the long term with continuity in the management team and the board, and provide additional resources to accelerate the company’s growth momentum further.”
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