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General Electric said it will sell a majority interest in GE Capital International Services (Gecis), GE's global business-processing operation, to two private-investment firms, General Atlantic Partners and Oak Hill Capital Partners.
Gecis is one of the largest shared-service providers in the world, employing more than 17,000 professional staff. It will continue to serve GE under a multiyear contract, and Pramod Bhasin will remain as president and chief executive officer, supported by the current Gecis global management team. Approximately 1,000 Gecis employees will remain with GE. (See Innovations in Outsourcing).
The transaction values Gecis at $800 million. Under the agreement, GE will retain a 40% stake in Gecis and receive cash proceeds of about $500 million, which it plans to use to fund growth initiatives.
"This transaction allows us to offer our quality business-process services to an expanding roster of leading companies worldwide," Bhasin said in making the announcement.
Bhasin said General Electric's decision to commercialize Gecis was driven by the opportunity to realize significant value from Gecis' scale and to broaden its global offerings by meeting the needs of other potential clients, many of which have expressed strong interest in partnering with Gecis to make their global operations more efficient.
"Gecis pioneered and set the standard for high-quality business processing around the world," said GE Chairman and CEO Jeff Immelt, in a statement.
Established in 1997 to provide internal business support for GE, Gecis has built global operating capabilities supporting nearly 1,000 business processes across each of GE's 11 business units, including critical finance and accounting, supply-chain management, customer-service support, software development, data modeling and analytics activities.
"Gecis is a powerhouse organization that is well capitalized with an expanding footprint," said Oak Hill Managing Partner J. Taylor Crandall. "Gecis has a clear strategy and a compelling business proposition: the ability to perform value-creating business processes for companies, making them more productive and allowing them to focus on their core competencies."
Mark F. Dzialga, a partner with General Atlantic, said, "The market for process outsourcing continues to experience tremendous growth. By serving GE's businesses with expertise in a diverse range of industry verticals, Gecis has acquired unmatched capability that makes it a highly attractive partner to companies worldwide. As experienced investors in information technology and technology-enabled services, we look forward to working with Gecis' outstanding management and contributing to their continued success." |
