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The Deal: Blackstone Clinches $625M Pactera Deal

NEW YORK (TheStreet) -- Tech outsourcer Pactera Technology International (PACT) on Thursday agreed to be taken private by a consortium led by Blackstone Group (BX) for $625 million after the two sides finally agreed on a valuation.

Terms of the deal value Beijing-based Pactera at $7.30 per share, a premium of 39% over the company's close on May 17 prior to its public announcement that it had received an offer. Pactera's American depositary shares on Wednesday closed at $6.54 on the Nasdaq, 11% below the buyout offer.

Pactera management, with support of Blackstone, approached the company's board in May with an offer of $7.50 per share, but the group in September lowered its offer to $7 per share after Pactera twice lowered its forecasts. The company offered no commentary on the revised price, but said that a special committee of independent directors had approved the $7.30 per share offer unanimously.

The deal is subject to shareholder approval. Pactera said the members of management have entered into an agreement to vote their shares in favor of the transaction. Bank of America Merrill Lynch, Citigroup Global Markets Asia and HSBC Bank USA have agreed to provide committed debt financing for the deal.

Pactera was formed from the 2012 merger of VanceInfo Technologies and HiSoft Technology International. The company in the twelve months ending June 30 reported Ebitda of $35.85 million on sales of $537.14 million.

The Pactera special committee was advised by JPMorgan Securities, with Shearman & Sterling serving as U.S. legal adviser and Conyers Dill & Pearman serving as Cayman Islands legal adviser.

Skadden, Arps, Slate, Meagher & Flom is U.S. legal adviser to JPMorgan. Pactera was represented by Orrick, Herrington & Sutcliffe in the U.S. and by Fangda Partners in China.

The consortium was advised by Citigroup Global Markets and a Ropes & Gray team including Gary Li, James Lidbury, Paul Boltz, Kim Nemirow and Michael Nicklin, Geoffrey Lin, David Chapin, James DeGraw, Jay Kim, Elaine Murphy, Loretta Richard, Peter Welsh and Deidre Johnson.

Cleary Gottlieb Steen & Hamilton served as U.S. legal adviser to the management members in the consortium.

Walkers Global and Jun He Law Offices are serving as Cayman Islands and Chinese legal advisers to the consortium, respectively, with Davis Polk & Wardwell acting as U.S. legal adviser to Citi.

--Written by Lou Whiteman in New York

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