PE biggies vie for $400m CMS buyout

Written By Unknown on Rabu, 15 Oktober 2014 | 22.23

MUMBAI: Three bulge-bracket global investors — Temasek Holding, Carlyle Group and Baring Private Equity Asia — have been shortlisted for a potential buyout of India's largest cash management services company, CMS Info Systems, valued at about $400 million, two people directly familiar with the matter said.

The current majority owner and private equity giant Blackstone mandated NM Rothschild for a sale process currently underway. The three investors are expected to make firm offers by November-end before the preferred suitor is selected, sources said.

Several buyout private equity funds like KKR & Co, Apax Partners, Advent and Warburg Pincus had shown preliminary interest in the transaction but are no longer in the fray. Temasek, Carlyle and Blackstone declined to comment on the story while Baring Asia couldn't be reached immediately.

Blackstone has furnished robust legal opinions after some suitors voiced concerns about recent restrictions on FDI in security related services. In fact, Blackstone took a view that any bidder raising such concerns shouldn't advance to serious discussions.

In 2008, Blackstone paid $50 million to purchase a 55% stake in CMS Info Systems from the Mumbai-based Grover family, which continues to hold a 40% stake in the company. Former Microsoft India MD Rajiv Kaul, who partnered Blackstone in the acquisition, holds a small stake.

Blackstone, which began investing here eight years ago, could book four-fold gain as the New York-based investor plans to harvest some its earlier investments in the country, which has not been very favourable to profitable exits for long-term risk investors.

It has had successful exits, selling BPO company Intelenet to UK-based Serco Plc for $634 million in 2011 and monetizing shares in Emcure Pharma to Bain Capital for $110 million last year.

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