INDIA BUSINESS WORLD - DECEMBER 16th - DECEMBER 31st
- 2007
GE SELLS 4% GENPACT SHARES FOR $100 MILLION
GE has sold about a 4% stake in Genpact, India's largest business process outsourcing (BPO) firm, for about $100 million in a private transaction. Following the sale, GE's stake in the NYSE-listed BPO firm has come down to 18.8% from about 23% earlier. Private equity players General Atlantic and Oak Hill Capital Partners have a combined stake of 52% in Genpact. GE has sold 8 million shares at a price of $12.5 per share. In a filing with the Securities and Exchange Commission, Genpact said, "GE has agreed to sell, in a private transaction, approximately $100 million of Genpact common shares to an affiliate of a limited partner in one of Genpact's other shareholders."
Subject to the lock-up agreement that GE entered into with the underwriters of Genpact's IPO, the 8 million shares would not enter the public trading market as a result of the transaction, it added.
"Genpact is a good partner and continues to provide valuable support to our operations. This transaction is simply a part of our normal and on-going portfolio management activities and we look forward to a long and productive relationship," a GE spokesperson said.
"We welcome this diversification of our ownership base. We continue to have an excellent relationship with GE both as a client and as a shareholder. Our continuing significant revenue growth from GE is a reflection on the quality of this relationship," Genpact president and CEO Pramod Bhasin said. GE remains Genpact's largest client, accounting for about 57.2% of the BPO's revenue at the end of the July- September quarter this year. The BPO, which was a GE captive till 2004, got listed on NYSE in August and has a market cap of $3.03 billion. Genpact raised $494.11 million in August through its IPO, though falling short of a previously-announced target of about $565-635 million. It had sold a 17% stake to the public, of which half was offloaded by GE and the PE investors while the remaining was through issue of fresh shares.
Genpact's net proceeds from the IPO were about $247 million. GE's 5% stake dilution fetched it about $95 million while General Atlantic and Oak Hill's 8% stake dilution got them $152 million. Genpact expects revenue this year to be in the range $797-810 million, up 30-32% from $613 million in 2006.
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