Essar's Aegis BPO acquires AOL arm

BUYERS' MARKET

Global internet firm AOL's call centre facility in Bangalore has been acquired by Aegis BPO Services, an Essar group company.

The value of the deal was not disclosed by the companies. However, industry sources peg it around $30 million (Rs 120 crore).

AMERICAN PIE

To cut costs, global companies are hiving off their captive BPO operations. The trend was started by GE. Citibank is expected to follow suit this year and Aviva Insurance is also planning to take this route

Industry sources peg the value of the deal at Rs 120 crore. Aegis will provide customer service and technical support to AOL customers

The acquisition is expected to be completed by April-end

Aegis will provide customer service and technical support to AOL customers, while the latter will transfer 1,000-plus of its employees. The acquisition is expected to be completed by April-end or in May.

The decision by AOL to sell its captive BPO operations comes after a few global companies started this exercise to cut costs.

The trend was started by GE, when it reduced its stake in its BPO operations in India by selling majority stake in the business to two private equity players.

Another global financial institution, Citibank, is expected close a similar deal this year. Aviva Insurance is another firm which is planning to take this route.

The acquisition comes as a shot in the arm for Aegis with an annual revenues of over $200 million and an employee strength of 19,000.

Aegis CEO and Managing Director Aparup Sengupta said: "With AOL as a client, it gives a clear visibility to our portfolio and will strengthen our offshore customer management capabilities. AOL's competence allows us to get into the tech-support area covering voice and non-voice offerings."

At present, 85 per cent of Aegis' operations are in the voice category and the rest in the non-voice category. Acquiring AOL's call centre would aid the company in augmenting its operations and extending its horizontal services for new clients, Sengupta said.

"We are already working with Fortune 500 companies in the banking and telecommunications sector."

AOL's Executive Vice-President (international) Maneesh Dhir said AOL would continue to strengthen its local operations. AOL commenced call centre operations in July 2003.