The global private equity fund Advent International has agreed to acquire Encora, a US headquartered Indian origin IT services firm owned by Warburg Pincus, ET reported last month.
As part of the agreement, Warburg Pincus, the existing majority shareholder of Encora, retains a minority stake. Warburg controls 80 percent in the company, while the rest of the stake is held by promoters and management.
“We are thrilled to enter into this partnership with Advent as we continue to scale our differentiated software engineering service offerings,” said Venu Raghavan, chief executive officer, Encora. “Warburg Pincus has been a great partner to us over the last two and a half years, accelerating our rapid growth to a valuation of approximately $1.5 billion, he added.
Founded by Venu Raghavan in 2005, Encora provides services including platform modernization, cloud migration, data science and predictive analytics, machine learning, IoT, test automation and UI/UX optimization. Since rebranding as Encora in 2020, the company has expanded its focus within the Consumer Tech and Enterprise Tech sectors, and grown its global talent pool to over 6,300 associates across 40 global offices across LatAm, India, APAC and the US. Its major clients include AT&T, DHL, identity protection company InfoArmor, real estate investment trust Vereit, gift retailer 1-800-Flowers.com, Dubai Ports World and edtech platform Liaison.
Warburg has reached out to bulge bracket funds to sell the controlling interest in Encora in a deal valuing the firm at around $1.5 billion, ET first reported in October. Warburg had acquired Encora (formerly Indecomm Digital) for $200 million from existing investor Capital Square Partners and promoters in 2019.
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“We have seen tremendous growth in the digital technology services sector over the past few years, as the need for strong technology products has escalated across industries,” said Shweta Jalan, managing director at Advent.
This new partnership enables Encora to accelerate its global growth, both organically and through targeted M&A opportunities, expand its differentiated delivery model and advance its customer-facing digital services, added the statement.
Advent, with $81 billion in assets as of June 30, 2021, has invested in over 380 companies across 42 countries, throughout North America, Europe, Latin America and Asia.
Advent’s major acquisitions in the software sector are US based Conservice, Germany’s Aareon AG, while other portfolio companies include US based Tekion, Zenoti and Shift Technology.
In India, Advent has invested or committed $2.2 billion in 16 companies across sectors such as consumer products, financial services, healthcare and industrial since 2007. J.P. Morgan acted as exclusive financial advisor to Encora while Credit Suisse acted as financial advisor to Advent.
