Private equity giant Carlyle Group has picked up a significant minority stake in engineering services provider Quest Global Services for an undisclosed sum.
The development will also provide an exit to two of Quest’s existing PE investors, Bain Capital and Advent International. Quest Global’s chairman and CEO Ajit Prabhu will also buy an additional stake in the company.
Caryle will be acquiring the equity stake through its unit Carlyle Asia Partners, according to a statement on Tuesday.
“Our view is that Quest Global is well-poised to benefit from the growing focus on product innovation, digital engineering, embedded systems, increased outsourcing and disruptive technology advancements across industries,” said Amit Jain, managing director and head of Carlyle India Advisors.
Founded in 1997 by Prabhu and Aravind Melligeri , Quest Global offers services for the design, product development and operations of complex engineering systems. The company is present in 17 countries globally, with clients across the aerospace and defense, automotive, energy, hi-tech, healthcare & medical devices, rail, and semiconductor industries.
Carlyle and Quest Global declined to comment on VCCircle’s queries related to financial details of the transaction.
However, Reuters cited two people with knowledge of the matter as saying that the deal values the engineering outsourcing firm at $2 billion.
Quest was previously in talks with Apax partners, but the discussions fell through. In May this year, the Mint newspaper reported that Carlyle was looking to buy over 20% of Quest.
In Quest's last equity transaction struck in August 2021, homegrown PE firms ChrysCapital and True North acquired an 8.33% stake in the company for $150 million, The deal valued the business at around $1.8 billion.
In 2016, US private equity firm Bain Capital, Singapore sovereign fund GIC and Advent International invested $350 million (Rs 2,400 crore) to acquire minority stakes in Quest from US private equity firm Warburg Pincus and other shareholders.
To be sure, this is Carlyle’s second investment in Quest Global. It first backed the Singapore-headquartered firm in 2003, investing $6 million from the Carlyle Growth Fund. Promoters bought back the stake four years later backed by a line of credit from ICICI Bank.
The private equity major has invested over $35 billion in equity across 280 deals globally. It struck three new deals in India last year, with investments in Hexaware, Yes Bank and tiles and bathware company Varmora Granito.