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Economic Times
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Oiling the wheels: PE funds buy into fast-growing tech firms
- Private equity funds are investing in fast-growing technology firms, with recent deals in digital engineering and healthcare sectors.
- New Mountain Capital acquired 70-75% of Access Healthcare for around $2 billion, Kedaara Capital invested $350 million in Impetus Technologies, and more deals took place.
- Certain technology segments like cloud and analytics have seen significant growth, driving interest in large deals.
- In the past year, there have been over 21 PE-backed deals valued at over $300 million.
- PE funds active in tech deals include Blackstone, Carlyle, EQT Partners, Barings PE Asia, and ChrysCapital.
- PE investors often aim for healthy exits, frequently opting for IPOs for portfolio companies like Hexaware.
- India's software products market is projected to grow from $15 billion in FY23 to $44 billion by FY31, creating more investment opportunities.
- Analysts suggest that in the current industry climate, inorganic growth through mergers and acquisitions is preferred for higher growth rates.
- PE-backed IT services firms have been acquiring specialized businesses aggressively to drive inorganic growth.
- M&A investments by PE-backed IT services firms have increased by over 200% in the last three years, led by companies like Coforge, Hexaware, and more.
- Private equity funds focus on investing in and accelerating growth for large technology businesses.
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