Carlyle Group Offers $200 Million for Minority Stake in UST Global

American private equity firm Carlyle Group is reportedly negotiating for a minority stake in UST Global, an IT services and BPO provider with considerable operations in Mexico.

Carlyle Group is said to have offered an investment of around US$200 million in exchange for a 15% to 20% stake in UST Global. A definitive agreement could be signed in a few weeks, according to India business daily The Economic Times, citing unnamed sources.

In its efforts to cling onto market share, UST Global has approached many PE firms, including Blackstone Group, Apax Partners, Bain Capital, and Warburg Pincus, which invested US$360 million for a 43% stake in Tata Technologies last month.

Although the company is headquartered in Aliso Viego, California, UST Global is owned by Comcraft Group, a business conglomerate run by a Kenya-based non-resident Indian (NRI) Manu Chandaria. As a result, a large majority of its workforce is based in India.

In Latin America, UST Global runs delivery centers in Mexico, Costa Rica, and Brazil.

International equity firms are pouring funds into Indian IT and BPO companies, with professional services firms accounting for 53% of the US$5.4 billion invested in Indian firms during 1Q17, according to Venture Intelligence.

Capital Square Partners, Canada’s pension fund and Warburg Pincus have been at the forefront of these investments, with the former purchasing Aegis BPO from Essar Group.