Blog: Why Multiples could be buying PeopleStrong?

#MergersAndAcquisitions

Why Multiples could be buying PeopleStrong?

In a market where services and technology are typically built separately, PeopleStrong has created a strong presence grounds up over the last decade to build this unique value proposition.
Why Multiples could be buying PeopleStrong?

Well, the rounds of Acquisitions in HR Tech space in India just seem to be getting bigger and bigger. When CoCubes was acquired by AON in November 2016 at an estimated Rs 70-80 CR, it was one of the biggest acquisitions of an Indian HR Tech company in recent past. 

However with the news of PE Fund Multiples looking to acquire close to 80% in PeopleStrong for Rs 400 crore as reported by Mint, this could move the bar even higher. 

So Why Multiples could be buying PeopleStrong? 

PeopleStrong was founded in 2005 with a focus to build solutions in a highly fragmented market and provide a unique value proposition. From early on, they were focused on providing a platform based multi-process HR outsourcing solutions to its clients. They have built a unique combination of domain expertise, operational excellence, and innovative technology to deliver optimal level of services to its customers. Leading organizations in India like Genpact, Mahindra & Mahindra, HCL, Indigo, Tata Motors, Aditya Birla and Jaypee Group are some of its major customers. 

In a market where services and technology are typically built separately, PeopleStrong has created a strong presence grounds up over the last decade to build this unique value proposition. It has also shown its understanding of the market trends when it launched its Mobile First approach and app. 

With the HR market in India estimated to be at Rs 30,500 crore as per People Matters Report in 2013, it's a market with a growing interest from local and global players. 

Multiples, founded by Ex MD & CEO of ICICI Venture, Renuka Ramnath in 2009, is an india focused investment advisory firm, managing USD 1 Billion of PE funds. The investment approach is to either take a minority equity position or a management buyout. The investments of the fund are guided by new to market opportunities, consolidation of shareholder or business turnarounds. Renuka Ramnath is considered a leading lady of the Indian PE sector, she has successfully helped PVR twice, once in 2003 during the Australia village roadshow pull out and then again in 2013 to acquire cinema, thus making PVR the largest multiplex chain in India. This was her first move in the ever-growing HR services & technology space, which highlights the attractiveness of the sector. If one goes by her record of having delivered internal rate-of-return in excess of 70 percent, when the industry norm was half of that, one is assured that PeopleStrong is in for a great run going forward. 

As per her earlier statements, Ramnath mentioned that Multiples will focus on services sector and within that, the first generation entrepreneurs and proven business models are what she was looking to support. I strongly feel that this match with PeopleStrong will definitely help her further strengthen her record of delivering stellar results.

Responses from PeopleStrong & The HR Fund are still awaited.

(The views and opinions expressed in this article are that of the author and they do no represent the views of People Matters)

Topics: MergersAndAcquisitions, Strategic HR

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