On January 11, 2021, CCI approved the acquisition of 100% equity interest in Virtusa Corporation (‘Virtusa’) by Baring Private Equity Asia (‘BPEA’) (through Austin HoldCo), Austin HoldCo Inc., Atago Investment Pte Ltd. (‘GIC Investor’) and CPP Investment Board Private Holdings Inc. (‘CPPIB Investor’).^[1]

Austin HoldCo is ultimately owned and controlled by funds comprising the Baring Private Equity Asia Fund VII, a BPEA-affiliated fund.  It is not engaged in any business activity in India. BPEA is an international private equity firm and its funds have current investments in various entities that offer IT services globally.

GIC Investor does not have any physical presence in India.  The Singaporean Minister for Finance is the ultimate parent entity of GIC Investor. CCI has considered investment holding companies managed by GIC Group for the purpose of identification and assessment of overlaps and assessment.

CPPIB Investor is a Canadian corporation and is a wholly-owned subsidiary of the Canada Pension Plan Investment Board (‘CPPIB’). It has one Indian subsidiary i.e. CPPIB India Advisors Private Limited (‘CPPIB India’), which provides investment advisory services to CPPIB.

Virtusa is present in India through various subsidiaries and is engaged in the provision of information technology (‘IT’) services in India.

CCI found that BPEA (through its portfolio entities) and Virtusa operate in the overall market for IT services (‘Broad Relevant Market’) and have overlap in the following narrow segments: (i) IT services (managed services and cloud infrastructure); (ii) consulting services; and (iii) implementation services (collectively referred to as the ‘Narrow Relevant Markets’). It also found that GIC Group (through their portfolio entities) and CPPIB (through their portfolio entities) also have operations overlapping with Virtusa in the Broad as well as the Narrow Relevant Markets in India.

CCI approved the transaction noting that the combined market shares of (i) BPEA Portfolio Companies and Virtusa; (ii) GIC Group and Virtusa; and (iii) CPPIB and Virtusa, are insignificant in both Broad as well as Narrow Relevant Market. It also considered that the increment in market shares was negligible and other players present in the market would mitigate anti-competitive concerns. It found the vertical relationships between BPEA and Virtusa to be insignificant to raise any competition concerns.

[1] Combination Registration No C-2020/11/783.