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Essar arm to buy BPO in Philippines

BS Reporter in Mumbai | August 05, 2008 09:37 IST

Essar group-owned Aegis BPO on Monday said it will acquire Philippines-based BPO, PeopleSupport, for $250 million (around Rs 1,050 crore) in an all-cash deal.

The Mumbai-based BPO, which announced a definitive agreement to merge with the latter through Essar Services (Mauritius), its wholly-owned subsidiary, said the deal is expected to be concluded by the third or fourth quarter.

The merger, to be called Aegis PeopleSupport in the Philippines, has been unanimously approved by the boards of the respective companies. When completed, the PeopleSupport buy will become Aegis BPO's 11th acquisition in the last two-and-half years. The company recently acquired the call centre facility of global internet firm AOL in Bangalore for about Rs 120 crore (Rs 1.2 billion).

Under the terms of the current agreement, Aegis BPO will pay PeopleSupport stockholders $12.25 per share in cash. Post-acquisition, Aegis BPO expects to become a $500-million entity by FY10 from $320 million at present. The merged entity will have an employee base of 29,000 across the Philippines, India and the US. PeopleSupport achieved $150 million revenues in the last financial year.

Aegis has nine centres in the US. Around 67 per cent of Aegis BPO's current revenues come from the US; the remaining is from India. Following the merger, Aegis BPO will have operations in India, the Philippines, the US and Costa Rica. Aegis BPO expects the merger to help it provide onshore, nearshore and offshore BPO services or a combination of customised solutions to meet client requirements.

Additionally, Aegis BPO will benefit from greater scale, deeper domain expertise, a comprehensive and flexible solution offering, financial strength, and a rich international talent pool.

"This is a truly outstanding combination," said Aparup Sengupta, global CEO and managing director of Aegis BPO. "The addition of PeopleSupport's high performance operations in the Philippines and Costa Rica will enable Aegis BPO to become a leader." PeopleSupport CEO and Chairman Lance Rosenzweig said: "PeopleSupport's solutions bring compelling value to an organisation and Aegis's leadership and market strength can take PeopleSupport to the next level of excellence."

"The focus of the company is now to acquire firms providing services in English-speaking countries," a senior Aegis BPO executive told this paper earlier.


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