Carlyle sees more growth in digital IT services after PK exit

The firm said this week it would sell PK to Concentrix in a transaction valued at roughly $1.6bn after a five-year hold.

Carlyle Group sees significant tailwinds in the next-generation IT services sector and expects to remain active in the space after selling its majority stake in global CX design engineering company PK.

Carlyle announced this week it would sell its stake in the company to Concentrix in a deal valued at roughly $1.6 billion. The sale comes five years after Carlyle invested $330 million in the business.

Terms of the sale include PK contributing about $530 million of revenue and $85 million of adjusted EBITDA in the first full year after the acquisition, the company said.

Throughout Carlyle’s investment period, PK generated consistent organic growth on the foundation established by the company’s four co-founders Vijay Ijju, Vivek Kumar, Manish Mehta and Jeff Miller.

According to Carlyle, a key to PK’s continued success was hiring CEO Dinesh Venugopal last year.

Carlyle also supplemented PK’s organic growth with six strategic acquisitions including Lenati, a customer experience consultancy, which bolstered the company’s “tip of the spear” strategy and design capabilities, according to the firm.

The transaction is expected to close in Concentrix’s first fiscal quarter of 2022, subject to regulatory requirements and other customary closing conditions. Concentrix specializes in customer engagement and business performance.

“When we invested in PK, we saw an opportunity to partner with a visionary, founder-led team to help drive transformative business growth through organic and inorganic opportunities,” said Julius Genachowski, a managing director on Carlyle’s technology team. “We are proud of PK’s talented CEO and deep team and thrilled that the company will continue its journey with Concentrix.”