Back to top

Analyst Blog

The Blackstone Group L.P. (BX - Analyst Report) announced that it has made a bid to take over Pactera Technology International Ltd. , a U.S. listed Chinese company. The deal has been valued at $680.4 million.

Blackstone has offered $7.50 per share for the U.S. traded shares of Pactera. This deal would result in Pactera being converted into a private firm and subsequently lead to its delisting from the NASDAQ. However, the proposal is under review by a special committee comprising independent directors formed by Pactera.

Blackstone made the non-binding proposal to Pactera through its global private equity fund worth $16.2 billion. This is the biggest buyout fund in the world.

Pactera, the largest technology outsourcing firm of China, was formed in 2012 through a merger of HiSoft Technology International Ltd and VanceInfo Technologies Inc. The Beijing-based company offers technology outsourcing and consultancy services to blue-chip companies located worldwide.

Of late, private equity firms have indulged in buyouts of U.S.-listed Chinese companies.This trend comes owing to the delisting of Chinese companies that have gathered momentum as a result of accounting irregularities and frauds. This has further affected other U.S. listed Chinese firms.

Recently, Citic Capital Partners entered into an agreement with U.S.-listed Chinese I.T. services firm, AsiaInfo-Linkage, Inc. to purchase the latter. The deal was sealed for $890 million.

Earlier in Apr 2013, shareholders of Focus Media Holding Ltd. , a Chinese advertising company, entered into an agreement with private equity firm Carlyle Group to acquire the former. The deal was sealed for $3.7 billion, which to date has been the biggest leverage buyout in China.

The deal is expected to boost Blackstone’s revenues due to China’s rapid economic growth, which attracts investors to private equity. However, unsatisfactory returns might hamper the company’s growth going forward.

Blackstone currently carries a Zacks Rank #3(Hold).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%