GE Sells 60% of Back-Office Unit in India

General Electric Co. said Monday that it had sold a majority of its Indian back-office unit to exit a non-core business and help the fast-growing unit gain new customers.

The sale of 60% of GE Capital International Services, or GECIS, for about $500 million is the biggest deal so far in India’s consolidating $3.6-billion back-office industry.

That industry is growing at 50% a year, but GE felt the sale to private equity firms General Atlantic Partners and Oak Hill Capital Partners would free up capital for investment in other areas.

“We saw the opportunity for GECIS to grow, [but] that did not fit with our strategy,” said Scott Bayman, president of GE India.

GECIS started out as an internal operation center that served GE subsidiaries in India, China, Mexico and Hungary. By moving out of the GE fold, it will make the company more externally focused, GECIS President Pramod Bhasin said.

The unit does not fall under the umbrella of any of GE’s 11 main businesses, which range from media group NBC Universal to GE Energy.

GE said it wanted to maintain an equity stake in GECIS because it would continue to be GECIS’ biggest customer under a multiyear deal.

GECIS, the largest back- office services operation in India, is valued at about $800 million after the deal.

It began operations in 1997 and is currently profitable. It expects to post revenue of $420 million in 2004 and $513 million in 2005.

The deal, subject to government approval, probably will be wrapped up in six months.