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Blackstone, other investors commit up to $2.8 billion to acquire controlling stake in Mphasis

A wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA), UC Investments and other long-term investors will co-invest along with it, Blackstone said in a statement

Blackstone on April 26 announced that private equity funds managed by it have entered into definitive agreements to acquire a majority stake in Mphasis Ltd.

A wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA), UC Investments and other long-term investors will co-invest along with it, Blackstone said in a statement.

Amit Dixit, Co-Head of Asia Acquisitions and Head of India for Blackstone Private Equity, said “This investment enables us to continue creating value for the long term with continuity in the management team and the board, and provide additional resources to further accelerate the company’s growth momentum.”

Nitin Rakesh, CEO and Executive Director of Mphasis said, “We believe Blackstone’s sustained strategic partnership will help the company accelerate its growth and scale new heights. Sovereign and pension funds co-investing is a testimony of long-term commitment and a vote of confidence of a marquee set of shareholders.”

This transaction will trigger a mandatory open offer for the purchase of up to 26% additional shares of the company from the public shareholders and the acquiring entity has released a public announcement to the stock exchanges.

Based on the open offer subscription, the blended purchase price will vary between ₹1,452 to ₹1,497 per share (12-16% premium to 12-month average price and 3-6% discount to 6-month average price) and the purchase consideration will vary between ₹15,200 crore to ₹21,000 crore (or, approximately $2.0 billion to $2.8 billion).

It may be recalled that a different fund managed by Blackstone had acquired a controlling stake in Mphasis from Hewlett Packard Enterprise in September 2016.

The sale is expected to complete in the coming months, subject to customary closing conditions and regulatory approvals, Blackstone said.

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