Carlyle teams up with Ramesh Vangal to acquire Cambridge Solutions

Private equity giant Carlyle along with serial entrepreneur Ramesh Vangal are said to be the frontrunners in acquiring Cambridge Solutions, one of the largest listed BPO companies. Carlyle may purchase 42% of the other promoters’ stake for sale at $170 mn. The joint bid would control around 60% stake, valued at around $250 mn, in the acquired company, thus valuing the company at an EV of $400 mn. Other firms in the fray include bidders like global IT major EDS, PE firm Apollo and Indian IT company HCL.

The Cambridge acquisition will be Carlyle’s largest investment in India till date. The PE major is joining hands with Mr. Vangal, a co-founder and the largest individual shareholder in Cambridge with 18% stake, is assisting Carlyle in effecting a buyout.

Carlyle’s move to buy is seen in the context of Cambridge, which has substantial revenues locked up in the insurance processing domain that could unleash synergies given its rather large exposure to the insurance sector in the US. Almost two-thirds of Cambridge’s Rs. 1200 crore-revenue comes from high-end BPO operations spread across the US, India and Europe. It has a strong presence in the lucrative insurance processing domain, with around 2000 of its total 4500 employees located in the US.

Read more in The Economic Times article.
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HCL Technologies may bid for Cambridge Solutions
Scandent to sell stake in Cambridge Solutions; Apollo, Fidelity, EDS approached

HCL Technologies may bid for Cambridge Solutions

One of India’s premier IT companies, the $1.1 bn-HCL Technologies may bid for Cambridge Solutions, one of the top BPO outfits of the country, valued at around $350 mn. If the deal sails through, it may be the biggest M&A ever in the Indian IT space.

HCL has signaled early interest to acquire around 42% promoter holding put up for sale. The promoters of Cambridge have mandated Lehman Brothers to scout for potential suitors. The promoters of Cambridge, which includes names like ex-McKinsey chief Rajat Gupta, the US-Canadian Bronfman family of Seagram fame, serial investor Ramesh Vangal and former PepsiCo chairman Chris Sinclair, together hold 59.15% stake. It is learnt that Mr. Vangal, who is the single largest individual investor with around 18% stake, is unlikely to offer his shares.

Almost two-thirds of Cambridge’s revenues comes from high-end BPO operations spread across the US, India and Europe. It has a strong presence in the lucrative insurance processing domain, with around 2000 of its total 4500 employees located in the US. HCL has BPO operations at nine centres in India, two in the UK and one in Malaysia, which provide both voice and non-voice services. The BPO operations constitute around 17% of revenues and employ around 10,000 people.

Read the article in The Economic Times.
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Scandent to sell stake in Cambridge Solutions; Apollo, Fidelity, EDS approached

Scandent to sell stake in Cambridge Solutions; Apollo, Fidelity, EDS approached

The Economic Times reports that the Scandent Group is selling its majority stake in Cambridge Solutions. Investment bank Lehman Brothers is scouting for buyers for Cambridge which has a large BPO operation in the US. Some US-based funds such as Apollo, Fidelity and strategic players like global IT major EDS have been approached. An information memorandum has also been drafted for the prospective buyers. Cambridge is expected to fetch a valuation of anything above $300 mn, making it the second largest domestic deal in the BPO industry, after the $500 mn sale by General Electric of its 60 % stake in India’s biggest BPO outfit Genpact to Oak Hill Partners and General Atlantic in 2004. At present, the group of original promoters-this include serial entrepreneur Ramesh Vangal, former Pepsico CEO Christopher Sinclair, McKinsey honcho Rajat Gupta, US-Canadian Bronfman family of Seagram fame, the Chanderia family and current CEO Satyan Patel-holds 59.15% stake in Cambridge.