EQT Partners AB, PAG, Blackstone Inc. (NYSE:BX) and CVC (CVC Capital Partners plc (ENXTAM:CVC)) are among suitors in talks to acquire a controlling stake in software services firm ValueLabs (ValueLabs Services Private Limited) from the promoters, according to three people with information on the deal. A potential deal will value the Hyderabad-based company at around $1 billion underscoring the growing trend among large risk investors seeing enterprise tech as a high growth, yet stable sector. "Currently, due diligence is on," one of the persons with direct knowledge of the development said adding that the first round of bids are likely by end of November.
Global PE firms are betting big on mid-sized information technology and enterprise technology services providers coming out of India. "There are other PE (private equity) firms and some large strategics who will also likely look at it apart from these four firms," the first person cited above added. (Strategics in private equity parlance refers to strategic players who are acquirers from the same or adjacent industries.) Investment bank Goldman Sachs is advising the promoters on the sale, The Economic Times reported in October.
"The promoters-the Donakanti Family will likely continue to hold a minority stake," the second person with knowledge of the deal said. Queries emailed to the spokespersons of EQT, CVC and ValueLabs did not elicit any response. Spokespersons for Goldman Sachs, Blackstone, and PAG declined comment.
