Hinduja BPO arm buys Canadian firm OLS for Rs 345 cr

HGS (formerly known as Hinduja Global Services), the business process outsourcing company from the Hinduja Group, announced the acquisition of Canada-based On-Line Support, a customer relationship management company, for C$74.85 million (Rs 345.8 crore). This is an all-cash deal.

OLS offers technical support, inbound and outbound sales, customer care and customer retention in English and French languages and has 1,650 seats at 10 sites in Canada. In 2010-11, it had a turnover of C$63.4 mn (Rs 293 crore) and has close to 1,800 employees. It has presence in media, telecom, technology and BFSI (banking, financial services and insurance) works with clients such as Bell Telecom, Virgin Telecom, Apple and American Express.

“This acquisition will reduce our dependence from the US markets. After this, our revenues from the US will come down from 75 per cent to 60 per cent. The Canadian market, unlike the US, is growing and has had little impact from the recession. This acquisition will give us the market presence,” said Partha Sarkar, CEO.

The acquisition is being funded through internal accrual but the company is also in talks with banks to raise funds. “Before the acquisition, our cash was $150 mn. We are in talks with bankers to raise anywhere between $35 to $50 mn,” said Sarkar.

This acquisition presents both companies with opportunities to cross-sell and up-sell to existing clients. Consolidated annual revenue of HGS will cross $300 mn (Rs 1,330 crore). It now has a presence in 42 delivery centres across the USA, India, Philippines, Canada, Mauritius and the UK, with offerings in 25 languages. After the acquisition, HGS’ staff strength would be 21,300 employees worldwide.