Temasek reportedly close to acquiring 20% stake in Blackstone-owned VFS Global?

SINGAPORE: Temasek Holdings is reportedly close to finalising a deal to acquire a significant minority stake in VFS Global, a visa outsourcing and technology services firm.

According to The Edge Malaysia, sources familiar with the matter noted that this transaction could value VFS Global at approximately US$7 billion (S$9.07 billion), including debt.

Temasek, the Singapore state-owned investment firm, is expected to purchase around 20% of VFS Global, a company controlled by the US-based alternative asset manager Blackstone Inc.

The discussions remain private, and the individuals sharing the details have requested anonymity.

The deal could be announced as soon as today, Monday, with both Temasek and Blackstone currently working on the specifics. However, sources indicate that no final decisions have been made, and the discussions are still ongoing.

Despite Temasek’s potential new stake, Blackstone will retain its majority ownership of VFS Global. When asked for comment, both Blackstone and Temasek declined to respond.

Blackstone had previously explored different options for VFS Global, including a full or partial sale. Interest from investors included sovereign wealth funds, said Bloomberg on Friday. One option was to bring in a minority investor to raise capital and drive future growth.

VFS Global, headquartered in Zurich and Dubai, specialises in helping governments with administrative tasks like processing passport applications and visa services.

Founded in 2001 by Zubin Karkaria, who remains its CEO, the company has processed over 294 million applications since it started. It has also handled about 141 million biometric enrolments since 2007.

In 2022, Blackstone acquired its majority stake in VFS Global from Swedish firm EQT AB, which continues to hold a minority share alongside the Kuoni and Hugentobler Foundation.

Temasek, on the other hand, has seen its investment portfolio grow steadily. As of March, its net portfolio value stood at S$389 billion, up from S$382 billion the previous year. The company holds a mix of publicly traded and privately held assets across various sectors worldwide.

VFS Global also has a strong presence in India, providing visa application services on behalf of the US consulate in multiple cities.

The country has become a significant focus for global investors, particularly due to its rapid economic growth, which has positioned India as a prime destination for investment opportunities.

Blackstone has set an ambitious target to increase its private equity assets in India by US$25 billion (S$32.39 billion) over the next five years, according to Amit Dixit, its head of private equity in Asia, in March.

Temasek has also been heavily investing in India, having deployed nearly US$37 billion (S$47.93 billion) in the country over the past two decades. Vishesh Shrivastav, managing director of Temasek’s India investments, revealed that the company intends to significantly increase this figure, with plans to commit billions more in the coming years.

Rather than seeking majority control in Indian companies, Temasek has focused on acquiring minority stakes, helping firms grow from within.

This strategy has allowed the investment firm to concentrate on key sectors such as digitisation, consumption, and sustainable living, according to Mr Shrivastav. /TISG

Read also: Temasek to invest up to US$30 billion in US healthcare, financial services and tech in next 5 years

Featured image by Depositphotos