Blackstone, others set to take control of Mphasis
Shares of Mphasis climbed 6% in Monday’s trade after private equity funds managed by Blackstone entered into definitive agreements to acquire a majority stake in the IT firm. A wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA), UC Investments and other long-term investors will co-invest along with Blackstone.
The transaction triggered an open offer for acquisition of up to 26% stake at a price of Rs 1,677.16 per share, aggregating Rs 8,262 crore, payable in cash. Based on the open offer subscription, the blended purchase price is expected to be Rs 1,452-Rs 1,497 per share.
This would be 12-16% premium to Mphasis’ 12-month average price and 3-6 per cent discount to 6-month average price. Overall, the purchase consideration will vary between Rs 15,200 and Rs 21,000 crore.
Interestingly, Blackstone believes information technology and software services have been strong sectors for value creation for the last two decades.
Apparently, they find Mphasis, is backed by strong secular tailwinds as global enterprises increasingly migrate to the cloud. The company is exceptionally well-positioned given a terrific management team, strong order backlog, long-term strategic customer base, deep domain expertise in financial services, and a world-class suite of cloud and digital offerings.
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