Aegis hunts for acquisitions in Japan, Korea & Spain

A day after selling off a major chunk of its BPO business, Essar Group firm AGC Holdings is now hunting for acquisitions in untapped markets like Korea, Japan, Spain and Columbia.
As part of an agreement with Paris-based outsourcing giant Teleperformance, Aegis yesterday announced it will sell its BPO business in the US, the Philippines and Costa Rica for USD 610 million (about Rs 3,638 crore).
The deal was struck between AGC Holdings, a wholly owned portfolio company of Essar Global Fund, and the USD 4 billion Teleperformance for the sale of Aegis USA Inc (AUI).
In 2004, Essar forayed into BPO business through the acquisition of Aegis Communication Group, US, which has since then become a USD 400 million revenue earner employing over 19,000 across 16 centres in 3 countries.

Speaking to reporters today in a concall, Aegis Global CEO Sandip Sen said: "Our focus is on the high growth areas in emerging markets of Korea, Japan and Spain. We will use organic and inorganic means to fuel our growth and increase our value proposition."
The US, the Philippines and Costa Rica accounted for almost half of the total revenues of the BPO services provider, he added.

Sources told PTI that Aegis' strategy is to exit markets where return on investments (ROI) is around 7-8 per cent, and enter markets in Asia and Latin America where ROI could be as high as 10-12 per cent.

"Another interesting thing is that markets like Korea, Japan, Malaysia, Spain have lot of growth potential. Besides, the firm is also expanding in the Middle East and Africa, which again goes parallel with its strategy to tap high growth areas in emerging markets," they added.
Aegis is looking at expanding presence in Peru and Argentina, which is near-shore centres to the US and can handle the North American market. Also Spain will be helpful in further penetrating the Spanish-speaking market.
Besides, Malaysia can easily look after the markets in Korea and Japan. The South East Asian nation is already being tipped as one of the growth areas for BPO firms.

Delivery centres in these markets are turning out to be a high margin business.
When asked about the reasons behind selling operations in geographies that accounted for half of the firm's revenues, Sen said that the focus has changed and Aegis is focusing at emerging markets in Asia, Latin America, Middle East and Africa.
"Our focus is at growing business aggressively. We are looking at Korea, Japan and other two countries in Asia. Besides, in Latin America our business in Argentina, Mexico and Peru are witnessing good traction. We are also looking at Columbia and one other country to expand," he added.

On increasing presence in Malaysia, Sen said the country has lot of potential and can become the next Singapore.