Vangal plans full innings in Cambridge

By Staff
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Google Oneindia News

Bangalore/New Delhi, Feb 21: Scandent Group's move to sell off one of the largest listed BPO companies, Cambridge Solutions, has taken a new turn. Sources said Scandent's original promoter Ramesh Vangal, with about 18 pc stake, is likely to stay put in the company, and may rope in a new financial investor to buy out the current co-promoters.

Serial entrepreneur Mr Vangal, Rajat Gupta ed MD of McKinsey, US-Canadian Bronfman family of Seagram fame, former Pepsi CEO Chris Sinclair and the Chanderia family together hold a little over 59 pc stake in the Rs 1,200-crore company, which could carry a valuation upwards of 0 million. With Mr Vangal unlikely to offer his shares, now only about 41 pc stake of Cambridge could be on the block, sources said.

According to sources in the financial circle, big ticket private equity funds like Carlyle and Blackstone have shown interest in joining hands with Mr Vangal. Sources, however, added that even though Mr Vangal may rope in a new partner, he may not be interested in infusing fresh investments into Cambridge for now. Over the last one year Mr Vangal, the largest individual shareholder, has become a passive investor in Cambridge and diluted some stake.

While some other promoters want to cash out at present, sources said Mr Vangal still sees value in taking the company further. The possibility of Mr Vangal exiting in the event of a strategic buyer offering sizable premium is also not being ruled out all together. Mr Vangal's Katra Group that is bullish on other sectors like alcoholic beverages, healthcare and agri-business, has a significant holding in Cambridge.

As reported by ET earlier, Lehman Brothers has been scouting for potential suitors and funds and strategic investors have shown interest in the company. If through, this could well be the second largest M&A in the domestic BPO space after Oak Hill and General Atlantic bought 60 pc stake in Genpact valuing the former General Electric company at 0 million.

Mr Vangal along with Rajat Gupta and others set up Scandent Solutions, a broad-based IT services company, more than five years back. Sacndent bought Cambridge Integrated services, a global outsourcing firm and part of US-based Aon Corporation, for 5 million in 2004.

One year later, Scandent Solutions merged with Cambridge Services to form Cambridge Solutions. The company has substantial revenue locked up in the outsourcing business with exposure to insurance, financial services and healthcare sectors. It also offers business consulting, software engineering, maintenance and support services as part of the broad-based IT platform.


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