While Kumar is an executive partner with PE firm Siris Capital Group, he has also set up his own group company called Aeries, which will manage all his investments. I am looking at investing in technology and non-tech based companies in both the start-up phase and the secondary market,” said Kumar. The domestic fund is of Rs 100 crore and the international fund is Rs 200-250 crore ($50 million). “I have set up two funds that will cater to the domestic market and the international market. He will be wearing three hats - private equity investor, an angel investor and an entrepreneur. Having sold the company by successfully scaling it up, Kumar is now in India but in a different role. In 2010, CBay Systems acquired Spheris, a Warburg Pincus-invested company. In 2011, CBay Systems was listed on the Nasdaq as MedQuist Holdings with a market cap of $500 million. He partnered SAC Private Equity Group to acquire 70 per cent stake in MedQuist, a company seven times the size of CBay Systems, from Royal Phillips of Netherlands. After this, Kumar set out on an aggressive acquisition path. In 2007, when CBay Systems was listed on AIM exchange in London, it had a turnover of $60 million with a market capitalisation of $90 million and employee strength of 4,000, most in India. The acquisition valued MModal at 8.46 times earnings before interest, taxes, depreciation and goodwill amortisation and almost 30 times its net profits. JPMorgan’s PE arm paid $14 a share in cash for MModal, or 8.3 per cent more than the stock’s July 2 closing price. By the time he sold his company to One Equity Partners, it had revenue of $475 million.
Kumar, an Indian Revenue Service officer, started out as the assistant commissioner of income tax. It had operations in Annapolis, Maryland, and Bangalore. MModal started its journey in 1998 as CBay Systems, providing medical transcription services to hospitals, healthcare networks and physician practices across the US through its India-based work force.
One Equity Partners’s acquisition of MModal saw the exit of founder Venu Raman Kumar and PE player SAC Private Equity Group, both together owned 31-34 per cent in MModal. Another big-ticket deal came a month later, in August, when PE player Bain Capital announced the acquisition of 30 per cent of Genpact’s stock for $1 billion. However, one deal failed to make a buzz - the acquisition of Mmodal (formerly CBay Systems) by JPMorgan’s PE partner One Equity Partners for $1 billion.Īnnounced in July, it was one of the largest PE deals in the BPO space this year. The Indian business process outsourcing (BPO) sector has recently been in the spotlight, thanks to renewed interest by private equity (PE) players.
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