Global private equity major Blackstone has acquired VFS Global, the world’s largest visa processing service provider, from Swedish private equity (PE) firm EQT Infrastructure in a USD 1.1-billion deal, pinning hopes on global travel rebound. According to information available, Blackstone will hold a 75 per cent stake in the company; the balance will be held by EQT and Kuoni and Hugentobler Foundation.
Speaking on the development, Jyoti Mayal, President, Travel Agents Association of India (TAAI), said that a reputed investor like Blackstone would support VFS Global’s growth ambitions and digital transformation, which is vital for the entire industry. “It is in the interest of TAAI to see a financially sound visa service provider in India that serves major destinations and its governments. We could see more investments in technology to make the visa application process even smoother, faster and even more efficient for travellers and our members who help travellers in the application process,” opined Mayal.
In her view, Blackstone’s investment shows that they are very convinced about VFS Global’s mid to long term strategy. “This is a very positive sign for the Indian travel market,” said Mayal.
T C Guruprasad, Board member & MD, Ebixcash, feels that with international portfolio of travel backed business in different countries, Blackstone would bring in additional expertise and levers to drive growth for VFS in 140+ countries of their operation. “With an investor such as Blackstone new arenas of growth can be explored by VFS through organic and inorganic route along with synergies from the companies in their travel portfolio,” he pointed out.
When asked to comment, going forward, what will be the most challenging task for Blackstone? Mayal replied, “If they plan to change the structure of the business, that would be the biggest challenge, in my opinion.” But she is happy that Blackstone has put a strong focus on the Indian market. “I welcome any investment that strengthens the Indian inbound and outbound travel and tourism industry. And VFS Global is a key service provider in that ecosystem. VFS has a very strong relationship with TAAI & we would certainly like the continuity & support to further strengthen our relationship,” Mayal said.
Another industry veteran and a well-known face in the travel & tourism sector, on condition of anonymity, said that the acquisition of a majority stake in VFS by Blackstone is a testament to the enduring profitability of the visionary enterprise that Zubin Karkaria created. “ However, for agents and travellers, VFS is a mixed bag -while you have the ease of submitting various visas at one location, you simultaneously lose the direct interaction with the embassy, consulate for any clarifications since VFS merely collects the documents and forwards them,” said the person. He believes that the infusion of new capital will help in increasing staffing and streamlining procedures for more speedy disposal of applications.
VFS Global has been the market leader worldwide for 20 years, since its inception in 2001. “From my observation, the company has been very innovative and agile regarding services for governments and visa application customers. During the pandemic, the company showed resilience. In my opinion, with the right owners in every cycle of their growth phases, they have made the visa application process simpler and more efficient. Moreover, VFS Global has always supported the Indian travel fraternity. I like to collaborate with reliable companies with a vision for the future and be supportive, particularly in difficult times,” said Mayal.
With travel industry reviving post Covid impact and opening of multiple countries border, international travel is due for registering the pent up demand with corporate and leisure sector reviving soon. “With their leadership position in Visa segment and resurgence of growth across travel industry VFS would be able to consolidate the market further for visa which would be fuelled by travel growth of IT/ITES segment, global manufacturing units establishing in India moving from China under Make in India intiatives,” pointed out Guruprasad.
VFS Global declined to comment when contacted by TravelBiz Monitor. The company services more than 60 client governments through 3,500 visa application centres in over 140 countries across five continents. Since its inception, the company has successfully processed over 230 million applications and more than 100 million biometric enrolments.