Blackstone Group L.P
) announced that it has made a bid to take over
Pactera Technology International Ltd
), a U.S. listed Chinese company. The deal has been valued at
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Blackstone has offered $7.50 per share for the U.S. traded shares
of Pactera. This deal would result in Pactera being converted
into a private firm and subsequently lead to its delisting from
the NASDAQ. However, the proposal is under review by a special
committee comprising independent directors formed by Pactera.
Blackstone made the non-binding proposal to Pactera through its
global private equity fund worth $16.2 billion. This is the
biggest buyout fund in the world.
Pactera, the largest technology outsourcing firm of China, was
formed in 2012 through a merger of HiSoft Technology
International Ltd and VanceInfo Technologies Inc. The
Beijing-based company offers technology outsourcing and
consultancy services to blue-chip companies located worldwide.
Of late, private equity firms have indulged in buyouts of
U.S.-listed Chinese companies.This trend comes owing to the
delisting of Chinese companies that have gathered momentum as a
result of accounting irregularities and frauds. This has further
affected other U.S. listed Chinese firms.
Recently, Citic Capital Partners entered into an agreement with
U.S.-listed Chinese I.T. services firm,
) to purchase the latter. The deal was sealed for $890 million.
Earlier in Apr 2013, shareholders of
Focus Media Holding Ltd
), a Chinese advertising company, entered into an agreement with
private equity firm Carlyle Group to acquire the former. The deal
was sealed for $3.7 billion, which to date has been the biggest
leverage buyout in China.
The deal is expected to boost Blackstone's revenues due to
China's rapid economic growth, which attracts investors to
private equity. However, unsatisfactory returns might hamper the
company's growth going forward.
Blackstone currently carries a Zacks Rank #3(Hold).