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Genpact buys majority stake in Delaware limited liability company

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Genpact buys majority stake in Delaware limited liability company

Genpact Ltd.on Jan. 8 acquireda majority stake in Strategic Sourcing Excellence LLC.

The Bermuda-based financial technology company bought 51% ofthe outstanding equity interest in the Delaware limited liability company for initialcash consideration of about $2.6 million, subject to adjustment for closing dateworking capital, transaction expenses and indebtedness.

Under the equity purchase agreement, Genpact is entitled to upto $20 million of contingent earnout consideration, of which $9.8 million will bepayable only upon the exercise of either a put option or a call option. The $9.8million represents the selling equityholders' 49% interest in Strategic SourcingExcellence, according to a Form 10-Q filed May 9.

Genpact may exercise a call option to buy the remaining 49% equityinterest in Strategic Sourcing Excellence between Jan. 1, 2018, and Jan. 31, 2018.If it fails to do so, the selling equityholders may exercise a put option betweenMarch 1, 2018, and April 30, 2018, to require the financial technology company tobuy the remaining stake at a price ranging from about $2.5 million to $3.0 million.

The deal adds $327,000 worth of assets and $617,000 worth ofliabilities to Genpact. The preliminary estimated purchase consideration for thecompany's interest in Strategic Sourcing Excellence is about $14.5 million, includingthe fair value of earnout consideration and a preliminary adjustment for workingcapital, transaction expenses and debt.

In connection with the transaction, Genpact recorded $300,000in customer-related intangible assets, with an amortization period of five years.The deal provided the company with goodwill of about $14.5 million.

The company said the deal would benefit its procurement consulting,transformation and strategic sourcing capabilities.