General Electric Co. has sold a majority of its Indian back-office unit to exit a non-core business and help the fast-growing unit gain new customers.
GE sold 60% of GE Capital International Services (GECIS) for about $500 million to General Atlantic Partners and Oak Hill Capital Partners to free up some capital for investment in other areas. GECIS serves mostly GE subsidiaries, according to a Reuters report.
GECIS, the largest back-office services operation in India, is valued at around $800 million after the deal. It began operations in 1997 and is currently profitable, and expects to post revenue of $420 million in 2004 and $513 million in 2005. The deal, subject to government approval, is likely to be wrapped up in six months.
“We saw the opportunity for GECIS to grow, (but) that did not fit with our strategy,” said Scott Bayman, president of GE India. By moving out of the GE fold, it will broaden its potential clientele.
GE will continue to outsource services to GECIS under a multi-year deal, and its business with the firm was expected to grow by 10% to 15% a year.