Private equity giant Blackstone Inc. is reportedly talking with multiple equity funds management companies to sell a significant minority stake worth 1 billion dollars in IBS Software. This follows the failed attempts of the company to list its business on a foreign exchange.
IBS Software is a global IT company that delivers enterprise software solutions across the aviation and travel industries. Founded in 1997, the company has offices in India, the United States, Europe, and the Middle East and employs over 3,000 people.
The reports of Blackstone’s intention to sell up to a $1 billion stake in IBS Software emerged in July 2020. A sale of approximately 15-20% of the company at this valuation could generate a return of $1 billion for Blackstone. The private equity giant has been an investor in IBS since 2013, with an investment of $150 million.
The ongoing talks are at an advanced stage, and there is no assurance that the deal will be completed in the near future. Blackstone’s decision to exit follows the rising competition in the Indian hi-tech space and the consequent fall in the valuations of companies.
The failed attempt to list IBS Software is the second setback for Blackstone, the first being its decision to back out of a public offering for theme park operator Essel World. The deal was canceled due to the Covid-19 pandemic.
The Blackstone-IBS Software deal, if successful, will be the latest in a series of exits by private equity investors from India-based tech companies. Other notable exits in the past include Warburg Pincus from NIIT, True North from JustDial, and Baring Asia from Teamlease.
The successful transaction will represent a significant milestone in the Indian tech sector, as it will show that even amid the Covid-19 pandemic, private equity investors can exit their investments. This bodes well for future investments in the industry, as investors will have more confidence in the sustainability of the Indian tech sector.