Hexaware Technologies rallies over 5% on reports of stake buy by Baring PE

NEW DELHI: Hexaware Technologies Ltd surged over 5 per cent in morning trade on Friday, following reports that its board will meet later today to approve the purchase of a controlling stake in the company by Baring Private Equity Partners Asia.

“Barings will buy out the 42% stake from the family of Hexaware founder Atul Nishar and private equity firm General Atlantic Partners, which is valued around $400 million,” ET reported.

At 09:20 a.m.; Hexaware Technologies pared some of the morning gains and was trading 2.1 per cent higher at Rs 121.40. It has hit a low of Rs 121.20 and a high of Rs 125 in trade today.

This buyout will be followed by a mandatory open offer for an additional 26 per cent, making it amongst the headline PE deals in India's $108-billion IT exports sector.

This will also top Apax Partners' $330-million funding to iGate Corp for the acquisition of Patni Computer's in 2011. The transaction is expected to value Hexaware closer to $700 million (over Rs 4,200 crore), coming roughly at a 15-18% premium to the current market value.

The company's shares have gained 47 per cent so far this year. Investment banks Credit Suisse and Morgan Stanley are Hexaware's advisors.

Hexaware is India's ninth largest IT exporter with annualized revenue of Rs 912 crore in calendar 2012, and projected sequential growth of 3.5-5.5 per cent growth, significantly higher than industry median and its own performance in recent past.