Hewlett Packard Enterprise (HPE) has agreed to divest its majority stake in Indian IT services firm Mphasis for about $825m (£770m) to Blackstone Group.

Mphasis delivers infrastructure technology and applications outsourcing services, as well as architecture guidance, application development and integration, and application management services.

Blackstone will acquire about 84% of HPE’s stake for INR 430 per share. The remaining 16% will be bought via a mandatory tender offer.

Depending on the open offer subscription, the purchase price consideration will change between $825m to $1.1bn.

The transaction is inline with HPE’s existing capital allocation priorities. It is not estimated to have any adverse impact on the company’s ongoing commercial relationship with Mphasis.

HPE intends to renew the existing master services agreement with Mphasis for another five years as part of the deal.

HPE recognised about $650m of revenue and $110m of operating profit from Mphasis, on a fully consolidated basis, in fiscal year 2015.

The company also recognised nearly $75m of pre-tax earnings, representing its 60.48% ownership of Mphasis.

HPE Enterprise Services EVP and GM Mike Nefkens said: "While our financial relationship is changing, the business and commercial relationship with Mphasis remains an important part of our service delivery strategy.

"We remain committed to our strategic partnership with Mphasis and to providing our customers with the high level of service and support they expect from HPE."

The transaction is anticipated to complete in the second half of fiscal 2016. It is not expected to impact HPE Enterprise Services’ ability to achieve its FY16 operating margin outlook of 6% to 7%, or longer-term 7% to 9% operating profit margin target.

HPE and Blackstone have agreed on the terms of a master services agreement (MSA) which HPE proposes to sign with Mphasis, after approval by Mphasis’ board and shareholders.

The MSA will run for five years with three automatic renewals of two years each.

Under the MSA, HPE proposes to commit a minimum revenue amount increasing year over year and totalling $990m in the next five years.

Mphasis will also be included in HPE’s preferred provider programme, which may result in additional revenue opportunities.