Baring Private Equity Asia to buy CitiusTech
The deal was signed after a highly competitive bidding process that attracted some of the largest buyout PE funds, people aware told ET.
The formal agreement was signed on Thursday and a public announcement is expected within a few days, people with knowledge of the matter said. This will be the largest buyout in the healthcare tech space involving an Indian company till date.
ET reported in its July 8 edition that Baring was the frontrunner in the transaction.
The deal was signed after a highly competitive bidding process that attracted some of the largest buyout PE funds, people aware told ET. Baring eventually outbid New Yorkbased PE giant KKR.
The Hong Kong-based $17 billion fund also fended off two other groups – Goldman Sachs with New Mountain, and Chrys Capital along with Ontario Teachers’ Pension Plan. CitiusTech also drew interest from Blackstone, Bain Capital, Apax and CVC Capital Partners, among others.
The binding offers were submitted in the first week of July.
CitiusTech provides healthcare technology services and solutions to medical technology companies as well as healthcare and life sciences organisations. It employs over 3,000 people and has centres in India, Singapore, the UAE, the UK and the US.
The company posted $175 million in revenue with a 27-30% operating margin in fiscal 2019 and clocked an estimated Ebitda of $55-60 million. The company therefore was richly valued at 18x forward multiple.
PE firm General Atlantic had invested $111.25 million in CitiusTech in March 2014 and owns about 32% of the company, with Koita, Moorjani and employees holding the rest. GA had mandated JP Morgan in April to find a buyer. GA is expected to make in excess of a 3.5x return on its investment.
Baring will end up owning about 80% of CitiusTech through a combination of primary and secondary sales, but the founders and the management team will continue to run the business.
Baring, GA and CitiusTech were not immediately available for comments.
This would be Baring PE Asia’s first healthcare tech investment in India, after owning healthcare platforms and pharmaceutical companies in China and Japan.