Hexaware announces agreement for Baring Private Equity Asia to acquire 41.8% stake

Mumbai - 23 August 2013

Hexaware Technologies Limited, a global provider of IT & BPO services and consulting, today announced that affiliates of Baring Private Equity Asia (“Baring Asia”) have signed definitive agreements to purchase approximately 125 million Hexaware shares, from Promoter Entities, led by Atul Nishar (which hold 27.7% of currently outstanding share capital), and GA Global Investments Ltd. (which holds 14.1% of currently outstanding share capital), an affiliate of General Atlantic (“GA”), in aggregate representing 41.8% shareholding in Hexaware. Under the terms of the Share Purchase Agreement, Baring Asia will pay the Promoter Entities and GA a price of INR126 or INR135 per share aggregating INR 1,575–1,687 crores (approximately $242-260 million based on INR/USD rate of 65), with the higher price of INR 135 per share being payable on Baring Asia reaching 50% or above aggregate shareholding in Hexaware in the transaction.

In accordance with the requirements under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ("SEBI (SAST) Regulations, 2011"), Baring Asia will make a Public Announcement for an open offer to the public shareholders of Hexaware to purchase up to an additional 26% stake at a price of INR135 per share aggregating INR 1,058 crores (approximately $160 million based on INR/USD rate of 65).

Atul Nishar, Chairman of Hexaware, said: “Since I founded Hexaware in 1990, the Company has differentiated itself by the quality of its relationships with some of the largest global corporations, with niche strength in certain key service offerings especially in Business Intelligence & Analytics, Enterprise Applications, Quality Assurance and Testing as well as the strength of the management team. Having started and personally been involved in the growth of Hexaware, it gives me great pleasure to receive a vote of confidence from an organization like Baring Asia. Hexaware will remain a public company, and the management team led by Mr. P. R. Chandrasekar will continue ensuring continuity of relationships with all stakeholders particularly our customers, employees and public shareholders. I look forward to Baring Asia taking Hexaware to new heights together with the management team.”

Jean Salata, Chief Executive & Founding Partner of Baring Private Equity Asia, said: “Atul Nishar has created a world class company and we are excited about supporting the next phase of growth of the business. Hexaware has an experienced management team, excellent customer relationships, a consistent track record and the ability to provide diverse services on a global scale. Baring Asia is excited about the growth opportunities that Hexaware offers and we look forward to working with Sekar and his management team to develop the group further. The total potential investment of over $465 million will be the largest investment made by Baring Asia in India, and is one of the largest ever foreign investments in the IT services sector in India, a sector where India continues to have a strong global competitive advantage".

Mr. Atul Nishar will continue as non-executive chairman of Hexaware and Mr. P. R. Chandrasekar will continue as CEO of Hexaware.

This transaction is subject to customary conditions, including receipt of required regulatory approvals, including anti-trust and competition clearances from the Competition Commission of India, and is expected to close by the end of this year. Hexaware has 8,700 employees, over 200 active customers, 8 global development centres, presence in 35 countries worldwide, and reported revenues of US$364 million for the financial year ended December 31, 2012.

Morgan Stanley acted as primary financial advisor and Credit Suisse as co-advisor to the Promoter Entities and General Atlantic. AZB & Partners acted as legal counsel for the Sellers. In addition J Sagar Associates acted as legal advisors for the Promoter. Khaitan and Co and Allen & Overy LLP acted as legal advisors to Baring Private Equity Asia.

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