Baring Asia Private Equity (Baring) has agreed to acquire the founders\u2019 (promoters + NIIT) 30.2% stake in NIIT Technologies for Rs 1,394\/share or 17.4X consensus FY2020E earnings. The acquisition reflects continued interest from PE firms in mid-tier companies listed in India and strategic buyers for private or US-listed offshore pureplays. This acquisition marks the first transaction in recent times at a >15X forward multiple for an India-listed IT services company by a PE player. Baring has entered into an agreement to acquire shares held in NIITT by the following \u2014(1) 3.49% of the Thadani Family Trust, (2) 3.49% of the Pawar Family Trust and (3) 23.22% of NIIT Limited. This aggregates to 30.22%. In addition, Baring has announced a mandatory open offer to acquire additional 26% from public shareholders. On full subscription to the open offer, Baring will own 56% of NIITT. At a price of Rs 1,394\/share, outflow for 56% stake works out to Rs 4,890 crore ($710 mn). The absolute valuation for NIITT works out to Rs 8,700 crore or US$1.26 bn. At the acquisition price, NIITT is valued at 17.4X FY2020E consensus earnings, in line with L&T Infotech and at a premium to other mid-tier companies. Promoters of many mid-tier companies have exited in the last few years. Hexaware, Polaris, Syntel are a few examples.\u00a0Mid-tier companies are attracting plenty of interest from PE firms and strategic buyers. The broad interest can be divided into two categories\u2014(1) strategic buyers\u2014interest is primarily among offshore pureplays that are private or listed in US. Onerous delisting norms have made India-listed assets less attractive for overseas strategic buyers though there are exceptions such as Virtusa\u2019s acquisition of Polaris Software.