Bain, GIC in talks to buy Genpact stake

The deal is expected to be completed by the year-end

US private equity firm Bain Capital is in advanced talks with the Government of Singapore Investment Corp (GIC) to make a joint bid for a 40 per cent stake in IT outsourcing company Genpact for $1.5 billion to $2 billion, three sources with direct knowledge of the matter said.

Private equity firm Apax Partners LLP is also competing for the stake in New York-listed Genpact, sources said.

Most of Genpact’s employees are in India, where IT outsourcing firms have thrived by providing Western firms with services such as processing insurance claims, managing payrolls and customer support at sharply lower cost.

Private equity firms General Atlantic LLC and Oak Hill Capital Partners, the two top shareholders of Genpact with stakes of 20.1 per cent each, are looking to exit the company, sources said.

A deal is expected to be completed by the year-end, they added.  General Atlantic may sell its full 20 per cent holding in Genpact or retain a small stake and sell it later through secondary share deals in the United States, sources said.

Genpact, which has a market value of about $3.7 billion, was set up by General Electric Co in 1997 in Gurgaon to provide back-office services to its group companies.

In 2004, General Atlantic and Oak Hill together bought a 60 per cent stake in the company from General Electric and it became an independent service provider.

Genpact, seventh largest IT and back-office employer in India according to industry group Nasscom, was listed on the New York Stock Exchange in August 2007.

Citigroup and Morgan Stanley are managing the stake sale process, sources said.
Bain, the private equity firm co-founded by Republican presidential hopeful Mitt Romney, has completed fundraising for its second Asia fund, closing at $2.3 billion, one of its senior executives said.

It had previously talked with other would-be partners about joining it in a bid for the Genpact stake.