Temasek completes agreement to acquire significant minority stake in VFS Global
By Baiju Kalesh, Manuel Baigorri and Elffie Chew
Temasek Holdings Pte is close to closing a deal to buy a significant minority stake in VFS Global, according to sources familiar with the matter. The deal could value the visa and technology outsourcing company at around $7 billion, including debt.
The Singaporean state investor is set to acquire about a 20% stake in privately held VFS, which is controlled by U.S. alternative asset manager Blackstone Inc., the sources said, speaking on condition of anonymity because the discussions are private. Temasek and Blackstone are working out details of a deal that could be announced as early as Monday, the sources said.
Blackstone will remain the majority shareholder in VFS after the transaction, the sources said. The discussions are ongoing and no final decisions have been made, they added.
Representatives of Blackstone and Temasek declined to comment.
Blackstone has been weighing options including a full or partial sale of VFS after receiving interest from investors such as sovereign wealth funds, Bloomberg News reported Friday. One option was bringing in a minority investor to raise cash and boost growth, the sources said.
VFS Global, with headquarters in Zurich and Dubai, provides governments with administrative solutions for processing passport applications and visa consular services, according to its website. It was founded in 2001 by Zubin Karkaria, who is also its CEO. It has processed more than 294 million applications since its inception and approximately 141 million biometric enrollments since 2007.
Blackstone acquired a majority stake in VFS from EQT AB in 2022 for an undisclosed sum, while the Swedish investor retained a minority stake in the company, together with the Kuoni and Hugentobler Foundation.
Temasek’s net portfolio value reached S$389 billion ($288 billion) in March, up from S$382 billion a year earlier. Its investments include both listed and closely held assets globally.
India focus
VFS has a strong presence in India, where it provides visa application services for the US Consulate in various cities across the country.
Global investors are increasingly turning their attention to India, attracted by its rapid economic growth, which has turned the country into a deal-making hotspot. Blackstone aims to add another $25 billion in Indian private equity assets over the next five years, its head of private equity in Asia, Amit Dixit, said in March.
Temasek has invested nearly $37 billion in India over the past two decades, according to Vishesh Shrivastav, managing director of India Investments. That figure is expected to rise sharply, as the company said last year it planned to invest billions more.
Temasek focuses on minority stakes and helps Indian companies grow from there, largely eschewing the trend of majority stakes in companies in the world’s most populous country. Core areas include digitalisation, consumption and sustainable living, Shrivastav said.
First publication: Sep 15, 2024 | 7:03 PM IST