[photopress:DarwinSuzsoft.jpg,full,alignright]Equity company Francisco Partners, which has $5 billion in capital, will invest $48 million in private equity into DarwinSuzsoft, a Chinese company that specializes in IT outsourcing.
DarwinSuzsoft CEO Dan Ross said in an interview, ‘We think it’s the largest deal ever done for outsourcing and offshoring in China. It’s not typical for a Chinese investment, but I think you’ll start to see more of this because the heat is growing rapidly in terms of the marketplace.’
DarwinSuzsoft employs 1,000 people, of which about 800 are in China. Its outsourcing business ranges from quality and assurance to application development, and its customers are primarily in the financial services, insurance, and the technology industries, with rapid growth in health care.
Francisco Partners will use the acquisition to gain greater access to opportunities in China. It gains majority ownership of the company and most of the seats on its board.
Dan Ross said companies are finding talent in China at wages that are 30% to 40% lower than India. And more companies, particularly banks, are also looking to the region as they grow frustrated with India’s high staff turnover rates.
Dan Ross said, ‘It’s a massive phenomena. I don’t know any large company that is not considering China at this point.’
The company originated as Darwin Partners and has had a presence in China for seven years. Last year it acquired Chinese software-development company Suzsoft and changed its name.
DarwinSuzsoft works closely to train and recruit students from Tsinghua University, which has a status in China similar the U.S.’s Massachusetts Institute of Technology, and recently hired 150 graduates from the university. It’s also funding academics working on a research project at Peking University, the equivalent of Harvard in China, Ross said.
Source: Information Week