US-based Bain Capital, which has been seen as one of the less aggressive among the bulge-bracket global private equity peers active in India, is stepping up its activities as it has now inked the fourth deal in the country this year.
The firm has announced one buyout, a debt transaction and floated one real estate joint venture so far this year. It has now sealed an investment in CitiusTech, a healthcare technology services provider.
This comes four months after The Capital Quest reported that Bain Capital was moving to seal another India deal.
CitiusTech said Thursday that Bain Capital is joining its cap table, alongside existing shareholder BPEA EQT, created via a merger of EQT and Baring Private Equity Asia. BPEA had acquired a majority stake in CitiusTech in 2019.
Financial terms of the private transaction were not disclosed but as reported by The Capital Quest, it involves BPEA selling a significant minority stake to Bain Capital.
“Both (PE) firms have significant track records scaling healthcare and technology businesses, and we couldn’t have picked two better partners to further support our growth ambitions,” said Bhaskar Sambasivan, CEO of CitiusTech.
He added that CitiusTech has more than doubled its revenues since the investment from BPEA in 2019 and the investment from Bain Capital will help the firm continue to scale and innovate, to better serve existing and new customers, and enable healthcare organizations to become more care-efficient, personalized, and data-driven.
Founded in 2005, CitiusTech provides a range of digital healthcare technology and consulting services to help over 130 leading healthcare and life sciences organizations deliver better outcomes, transform care and business processes, and make a meaningfully positive impact on patients.
“CitiusTech has established itself as a leader in healthcare digital innovation and business transformation, and a trusted partner to blue-chip healthcare clients with a strong track record of delivery excellence,” said Samonnoi Banerjee, managing director at Bain Capital Private Equity.
CitiusTech is one of the five India-related technology companies in Baring PE Asia’s portfolio. Others include Coforge, Hexaware Technologies and AGS Health & Software, besides the most recent addition last year of Hinduja Global’s healthcare BPO arm.
Previously, The Economic Times had named Bain Capital as the front-runner for the CitiusTech deal that had also seen bids from Apax Partners, Fujitsu, Carlyle and TPG among others.
Baring PE Asia has been looking to monetise multiple India bets and had reportedly toyed with a plan to float a special purpose acquisition company, or SPAC, to take CitiusTech public and open a window to sell shares. However, it eventually scrapped the plan and reportedly started looking to find buyers for its stake with a price tag of $2-2.5 billion for the company.
The proposed deal with Bain Capital will help it take out the principal investment while retaining the remaining stake, thereby nearly doubling the value in three years. This would translate into roughly 25-28% annualised returns after factoring in dividends payouts, if any.
Bain Capital has been on a dealmaking spree of late. It agreed to buy a fourth of IIFL Wealth from General Atlantic and Fairfax in March for $485 million, and then made a $175-million debt investment in real estate developer TARC Ltd.
It also teamed up with CDPQ’s lvanhoé Cambridge and Indian developer Lodha Group for a $1-billion warehousing joint venture.
CitiusTech was founded by IIT-Bombay graduates Rizwan Koita and Jagdish Moorjani in 2005. It provides healthcare technology services such as software development, regulatory compliance, business intelligence and analytics.
Baring PE Asia had bought an 80% stake in CitiusTech from General Atlantic in 2019. The deal value was believed to be in the $700-900 million range.
Interestingly, Bain Capital was in the fray that time as well. Singapore sovereign wealth fund GIC, Blackstone, KKR and CVC Capital were also said to be in the race at the time.
CitiusTech had acquired SDLC Partners a year ago, in its second takeover deal within seven months, for an undisclosed amount.
Pittsburgh, Pennsylvania-based SDLC provides technology transformation, consulting and automation solutions to healthcare payer organizations. Its team of more than 350 healthcare technology professionals work on areas such as member experience management, intelligent automation, data and analytics and core applications. SDLC also houses cybersecurity firm CyLumena.
This came after CitiusTech bought FluidEdge Consulting, a healthcare management consulting company headquartered in Philadelphia, in December 2020.