Baring Pe Asia to raise $350 million in debt and finance the acquisition of Igt Solutions
Bombay : Private equity firm Baring PE Asia, which is acquiring BPO firm IGT Solutions from Apollo Global, is in the process of raising $350 million in debt to fund the $800 million buyout, two people with knowledge of it have said of development.
Baring became the highest bidder for IGT Solutions, formerly known as InterGlobe Technologies. IGT is Baring’s third technology services acquisition in the past year, following the acquisition of Hinduja Global Solutions and Straive.
Aion Capital Partners, a joint venture between Apollo Global and ICICI Ventures, had acquired IGT Solutions for $230 million in 2019.
IGT Solutions, founded in 1998, is a business process management (BPM), services and technological and digital solutions company in the fields of travel, transport and hospitality.
The company’s customer base includes hotels, airlines, online travel agencies (OTAs) and travel management companies.
“Baring has entered into the debt financing arrangement for the buyout. They are raising $350 million in debt for this transaction. The financing has a 6-year term and bears interest at Libor plus 650 basis points. will translate to approximately 6 to 6.25x leverage,” the first person quoted above said, speaking on condition of anonymity as they are not authorized to speak to the media.
“Investors such as Barclays, Nomura, Canadian pension funds CPPIB and OMERS, KKR Credit and Tor Investments are participating in this debt financing. Buyout funds like Baring have been partially financing their leveraged buyouts for some time now and it has now become common practice among foreign private equity funds looking to buy out Indian companies,” he added. .
Baring PE Asia declined to comment on Mint’s questions.
Last month, credit rating agency Icra upgraded the company from A- to BBB+.
“The rating upgrade contributes to the strengthening of IGT Solutions Pvt. (IGTS), supported by the expansion of its global delivery footprint and the scaling of its business process outsourcing (BPO) services ), supported by its IT and digitization departments. These factors have supported the company’s strong financial risk profile, marked by healthy revenue growth, improved profit margins and strong debt protection measures. in fiscal 2022. In addition, the momentum of revenue growth is expected to continue in the short to medium term, supported by a considerable increase in air passenger traffic and the tourism sector,” the agency said. rating.
“The rating is however limited by the high exposure to sector concentration risks, as most of the revenue is generated by the travel and tourism industry. However, Icra has taken note of the company’s initiatives to diversify its industry focus through new clients in the retail and e-commerce sectors in fiscal 2022,” the agency added. rating.