Menu
HPE to sell majority stake in Indian IT services provider Mphasis to Blackstone

HPE to sell majority stake in Indian IT services provider Mphasis to Blackstone

HPE said the deal would help the company reallocate capital

Hewlett Packard Enterprise is to sell its majority stake in Indian IT services provider Mphasis to Blackstone Group, in a deal that will help the Palo Alto, California, company raise capital as well as continue to get services delivered from India.

HPE said the purchase by Blackstone of its shares at rupees 430 ($6.5) a share values its 60.5 percent stake at about US$825 million.

Under the agreement announced late Sunday, HPE will continue to have services delivered to it and its clients under an existing customer agreement that it plans to extend for another five years.

HP business accounted for 24 percent of the Indian company’s total revenue of rupees 15 billion in the fourth quarter. The company had 23,512 staff at the end of the quarter, delivering both business process outsourcing and IT services.

Mphasis, a company listed on Indian stock exchanges, was a subsidiary of Electronic Data Systems from June 2006, after EDS acquired a majority stake in the Indian outsourcer. The Indian company became a subsidiary of HP, after parent company EDS became a wholly-owned subsidiary of HP in 2008.

Many multinational companies have set up or acquired services subsidiaries in India to benefit from the country's relatively low cost staff. But some of them have divested and moved business to Indian IT services companies with an eye to raising cash and having greater flexibility in staffing and managing their outsourcing operations.

"While our financial relationship is changing, the business and commercial relationship with Mphasis remains an important part of our service delivery strategy," said Mike Nefkens, executive vice president and general manager of HPE Enterprise Services in a statement.

The transaction is expected to close in the second half of fiscal 2016, subject to agreed closing conditions. Under Indian takeover regulations, Blackstone has to make an offer for 26 percent of the remaining stock of Mphasis. The deal price for Blackstone could go up to $1.1 billion.

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Featured

Slideshows

Educating from the epicentre - Why distributors are the pulse checkers of the channel

Educating from the epicentre - Why distributors are the pulse checkers of the channel

​As the channel changes and industry voices deepen, the need for clarity and insight heightens. Market misconceptions talk of an “under pressure” distribution space, with competitors in that fateful “race for relevance” across New Zealand. Amidst the cliched assumptions however, distribution is once again showing its strength, as a force to be listened to, rather than questioned. Traditionally, the role was born out of a need for vendors and resellers to find one another, acting as a bridge between the testing lab and the marketplace. Yet despite new technologies and business approaches shaking the channel to its very core, distributors remain tied to the epicentre - providing the voice of reason amidst a seismic industry shift. In looking across both sides of the vendor and partner fences, the middle concept of the three-tier chain remains centrally placed to understand the metrics of two differing worlds, as the continual pulse checkers of the local channel. This exclusive Reseller News Roundtable, in association with Dicker Data and rhipe, examined the pivotal role of distribution in understanding the health of the channel, educating from the epicentre as the market transforms at a rapid rate.

Educating from the epicentre - Why distributors are the pulse checkers of the channel
Kiwi channel reunites as After Hours kicks off 2017

Kiwi channel reunites as After Hours kicks off 2017

After Hours made a welcome return to the channel social calendar last night, with a bumper crowd of distributors, vendors and resellers descending on The Jefferson in Auckland to kickstart 2017. Photos by Maria Stefina.

Kiwi channel reunites as After Hours kicks off 2017
Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow Electronics introduced Tenable Network Security to local resellers in Sydney last week, officially launching the distributor's latest security partnership across Australia and New Zealand. Representing the first direct distribution agreement locally for Tenable specifically, the deal sees Arrow deliver security solutions directly to mid-market and enterprise channel partners on both sides of the Tasman.

Arrow exclusively introduces Tenable Network Security to A/NZ channel
Show Comments