After the US$675 million deal, Pactera is expected to be integrated into HNA’s IT subsidiary EcoTech, which was formed in March this year. The sale was agreed upon in August but is yet to be fully closed.
The sale values Pactera at approximately US$930 million, including debt, according to The Wall Street Journal.
Headquartered in Haikou, the capital of China’s southernmost province of Hainan, Pactera provides IT outsourcing and consulting services to China’s domestic firms. It seems Pactera’s deep ties with Chinese multinationals persuaded Blackstone to lead a consortium to purchase the company in 2014.
But rising wages in China began to hurt Pactera’s profit. For fiscal 2015, Pactera reported revenues of US$777 million.
Perhaps, Blackstone put Pactera up for sale after Moody’s downgraded the IT company, citing declining margin. In February this year, Blackstone made a futile bid to sell the unit for between US$800 million to US$1 billion, according to Swiss news site Slator.
Analysts say HNA Group may turn out to be the perfect owner for Pactera, because the Chinese conglomerate has close relations with the country’s communist government, which readily supports domestic firms in crisis.
With delivery centers in Beijing, Haikou, Xi’an, Hong Kong, and San Francisco, EcoTech offers IT, online payment, and various cloud-based services in addition to VC consultation.