to the new: CVC, Warburg in race to acquire digital technology firm To The New

The US based private equity majors including CVC Capital and Warburg Pincus have joined the race to acquire To The New, Singapore-based digital technology company. There are 3 more global strategic companies in the race to acquire the company and binding bids are expected to be by next month, said sources.

The deal will value To The New at $600 million, added sources. Global investment bank Lincoln advises the promoters for the sale process.

Founded by IT veterans Deepak Mittal, Narinder Kumar, Raman Mittal and Satya Sharma, To The New is a new-age digital technology services firm providing product engineering, cloud, and FinOps services to enterprises, SaaS, and consumer tech companies.

The transaction will be in 2 phases where 70% stake will be acquired first and the remaining stake later, added sources.

With a clientele including TataSky, HDFC Funds, Indigo Airlines, Maruti Suzuki, Sony Liv, To The New operates from its six locations – Singapore, New Delhi, Dehradun, Dubai, New Jersey, and Sydney catering to over 300 customers worldwide. The company leverages its partnership with all leading hyperscalers like AWS (Premier Partner), Azure, and GCP to provide end-to-end cloud professional and managed services to its customers, said a company statement.

The company has posted a revenue of $146 million in FY23. Revenue is expected to touch $200 million, with an EBITDA of $35 million in FY24, said sources.

Mails sent to Deepak Mitta, CEO, To The New, spokespersons with CVC Capital, Warburg Pincus did not elicit any responses.CVC Capital was one among the contenders for acquiring Blackstone-owned minority stake in IBS Software, the leading SaaS solutions provider to the global travel industry. Later in May, Apax Partners acquired the stake.

CVC Capital’s India portfolio includes Sajjan India Ltd, leading agrochemical makers; cancer care chain Healthcare Global Enterprises and legal services firm UnitedLex BPO. In 2021, CVC Capital Partners had also won the rights to operate the Ahmedabad-based Indian Premier League cricket franchise (Gujarat Titans) for ₹5,625 crore ($700 million).

In October, Warburg Pincus acquired a significant stake in Everise, a Delaware-registered outsourcing firm, from the company’s primary shareholder, the Canadian asset manager Brookfield. The transaction valued the BPO at around $1 billion.

India’s IT/ITES sectors have seen big-ticket deals such as Carlyle’s $3- billion acquisition of Baring PE Asia-owned IT services firm Hexaware in 2021. Others include the $800-million IGT Solutions buyout by BPEA EQT and the $960-million investment in CitiusTech by Bain Capital.

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