The company that helped start the offshore outsourcing boom is getting out of the business--partly, at least. General Electric Co. said Monday that it would sell the majority of its stake in its Indian back-office processing business to a pair of private equity firms. Under the deal, expected to close in December, GE is selling 60% of its stake in GE Capital International Services to General Atlantic Partners and Oak Hill Capital Partners for a total of $500 million. The equity firms will each take a 30% stake in the business.

GE established GECIS in 1997 in India in an effort to centralize its back-office operations in a low-cost country. It currently employs more than 12,000 staffers. Among its offerings are finance and accounting, customer fulfillment, business analytics, and E-learning services. It also provides IT outsourcing and software development services.

GE says it wants to use funds from the GECIS sale to invest in high-growth markets such as security technology, a spokesman says. GE also believes the unit will generate more value as an independent company. "They will be able to compete in the marketplace on an even footing," says the spokesman.

Indeed, GECIS--there is, as yet, no new name for the unit--now looms as an offshore powerhouse. "Right out of the gate, they become the largest business-process-outsourcing player in the offshore market," says Atul Vashistha, CEO of outsourcing advisory firm neoIT. Vashistha says the deal could put other vendors with offshore BPO offerings, such as EDS and IBM Global Services, on the hunt for acquisition targets. "Otherwise, they won't have the scale to compete," he says.

Based on prevailing multiples, analysts say GECIS's standalone annual revenue will start out at about $400 million, given that the deal valued the company at about $800 million. Sources familiar with the deal say GECIS could add to that by acquiring more specialized BPO firms.