IPO PRICING: Genpact (G, GE)

By Douglas A. McIntyre Published Aug 2, 8:04AM EDT

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Genpact Ltd. has priced its IPO under the ticker "G" on the New York Stock Exchange of 35.294 milllion shares at a price of $14.00 per share. Unfortunately, the estimates pricing range was originally set at $16.00 to $18.00. The joint book runners for the offering were Citigroup, Morgan Stanley, and J.P.Morgan. Co-managers are listed as Merrill Lynch, Wachovia, Banc of America, Deutsche Bank, Credit Suisse, and UBS.

This is now a former General Electric (NYSE:GE) GE unit, and it is a Bermuda-based offshore provider of business process outsourcing to General Electric and to many large global companies. GE sold a 60% stake of Genpact back in 2004 to private equity, but it still held a minority stake and is the company’s largest customer with a contract through 2013. Half of the shares are being sold by the company for funding and half of the shares are being sold by holders.

Here is the company’s own basic description of itself, and it sounds more like an outsourcing and cost containment operation that operates within other companies (mostly within GE now). We manage business processes for companies around the world. We combine our process expertise, information technology expertise and analytical capabilities, together with operational insight derived from our experience in diverse industries, to provide a wide range of services using our global delivery platform. Our goal is to help our clients improve the ways in which they do business by continuously improving their business processes, including through the application of Six Sigma and Lean principles and by leveraging technology. We strive to be a seamless extension of our clients’ operations.

Genpact has more than 26,000 employees and operates in 9 countries. Its 2006 revenues were $613 million, and its business outside of GE is currently listed as 25.8%; so GE is almost 75% of its business for now. Immediately following this offering, 206,409,349 common shares and no preference shares will be issued and outstanding. GE is selling 5.88+ milliojn shares in the IPO, and based on the prospectus it appears that GE will continue to own a 22.65% stake in the company after the IPO.

Jon C. Ogg
August 2, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.