Recent Deals Highlighting Growth Potential

Since the beginning of 2025, investment bankers and industry executives report that at least four notable deals have been secured. Key transactions include:

• New Mountain Capital’s acquisition of 70-75% of Access Healthcare, valuing the firm at $2 billion.
• Kedaara Capital’s investment of $350 million in Impetus Technologies.
• HIG Capital’s acquisition of Converge Technology Solutions for approximately C$1.3 billion.
• Agilitas PE’s purchase of Tietoevry Tech Services for 300 million euros.

Growing Segments Attracting Attention

Shobhit Jain, head of enterprise, technology, and services at Avendus Capital, notes that some sub-segments, such as cloud services and analytics, have experienced growth rates between 20-40% since 2020. This trend has heightened interest in substantial deal-making opportunities.

Trends in Private Equity Transactions

The current surge in tech-related acquisitions follows 21 private equity-backed deals valued over $300 million between January of last year and March this year. In 2023 alone, nine such transactions were completed.

Most of these deals have been concentrated in digital engineering and healthcare revenue cycle management, with around 70-80 new buyers entering the market, according to Jain’s analysis.

Prominent Industry Players

Active participants in this evolving landscape include well-known private equity firms such as:

• Blackstone
• Carlyle
• EQT Partners
• Barings PE Asia
• ChrysCapital

The Quest for Inorganic Growth

Private equity backers are known for their strategic focus on achieving healthy exits from investments, often leaning towards public listings. A recent example is the public offering of Hexaware, a PE-backed tech firm.

Predicted Growth in the Software Market

India’s software products market is projected to expand significantly, from $15 billion in FY23 to $44 billion by FY31. This potential for growth fuels interest in technology investments, as indicated by a March report by SaaSBoomi and 1Lattice.

Shifting Focus Towards Mergers and Acquisitions

Given the current industry landscape, analysts suggest that relying on a purely organic growth strategy may not yield substantial returns, prompting an increase in mergers and acquisitions.

This trend is particularly evident in sectors like product engineering, data analytics, cloud computing, and generative artificial intelligence.

PE-Backed Firms Leading the Charge

Gaurav Vasu, the founder and CEO of UnearthInsight, highlights that private equity-backed IT services firms have been aggressive in acquiring specialized companies to expedite inorganic growth. In the last three years alone, M&A investments in this area have surged by over 200%.

Conclusion: The Future of Tech Investments

With major players like Coforge, Hexaware, CitiusTech, Mphasis, and R Systems leading the way, the trajectory of private equity investments in technology looks promising. These firms, backed by significant private equity funds, are poised to enhance the growth of large technology businesses.