Target: Aegis Ltd
Price: $200 million
Sponsors: Warburg Pincus, General Atlantic
Seller: Essar Group
The IT services arm of Indian steel-to-oil conglomerate Essar Group is in talks to raise $500 million to $600 million through a U.S. initial public offering and the sale of a stake to private equity firms, sources familiar with the matter told sister news service Reuters.
Essar’s Aegis Ltd is in talks with private equity investors including U.S.-based Warburg Pincus and General Atlantic to raise as much as $200 million in an equity placement prior to an IPO, sources said, declining to be named as they were not authorized to speak to the media before a public announcement. Aegis aims to raise as much as $300 million to $400 million in a U.S. listing, the sources said.
This would be the second global listing from the $17-billion Indian conglomerate, after it raised $2.5 billion in London listing of its energy arm in 2010. The company intends to complete the fund raising procedures in the next couple of quarters, said the sources. “Given the size and leadership position, Aegis would attract a lot of PE interest and the company is going ahead to strike a deal as a pre-cursor to the listing,” said a source.
The parent of Aegis, Essar Group, is controlled by Indian billionaire brothers Shashi and Ravi Ruia, and also controls London-listed Essar Energy and has interests in steel, ports and logistics.
An Essar spokesman said: “As a policy, Essar Group would not like to comment on speculations.” Warburg Pincus declined to comment, while General Atlantic did not immediately respond to an e-mail message seeking comment.
In January, Aegis’s CEO said the company was planning to raise between $300 million and $400 million through an IPO in the United States, United Kingdom or India to expand its business and research and development. Aegis, which employs more than 55,000 people, operates in 12 countries and has more than 300 clients across banking and financial services, telecom, health care, travel and hospitality, consumer goods, retail, and technology, its Web site showed.
(Indulal PM is a correspondent for Reuters in Mumbai.)