Warburg Pincus-backed Quest Global Engineering buys 84% stake in NeST Software

BANGALORE: Warburg Pincus-backed Quest Global Engineering has acquired an 84% stake in NeST Software, the engineering and embedded services business of Kochi-based NeST Group, for slightly over Rs 500 crore.

Bangalore-based Quest provides engineering outsourcing services to clients that include Rolls Royce, GE, Pratt & Whitney and Airbus. The NeST deal will bolster Quest's revenue by about Rs 300 crore and also give the Warburg Pincus-backed company a significant start in the healthcare domain. Investment bank o3 Capital advised on the transaction.

The acquisition will add 1,900 employees, taking Quest's total strength to 6,850. About 4,500 of these employees are in India, 1,350 in the US and 1,000 in Europe.

Most of Quest's India employees are in Bangalore and Belgaum, and that of NeST in Thiruvananthapuram.

Quest said its revenue in the year ended March 2014 was $251 million (Rs 1,500 crore) and expects that to grow organically — excluding NeST — to $290 million (Rs 1,740 crore) this year.

The sale will see NeST, a $200-million enterprise founded by Silicon Valley entrepreneur Jawed Hasan, staying focused on hardware, manufacturing and R&D domains.

Quest clinched the deal pipping private equity investor Kedaara Capital, who was seen as a front-runner in the deal-making till three months ago. Kedaara, founded by former Temasek honcho Manish Kejriwal and General Atlantic MD Suneesh Sharma, had done extensive diligence work on the transaction before dropping out.

"It was a hard-fought battle for us," said Ajit Prabhu, who founded Quest together with long-time friend and colleague Aravind Melligeri in 1997.