Infomedia to acquire 2 BPO firms for $7 mn

Yellow pages and niche magazine publishing major Infomedia India will acquire two business process outsourcing (BPO) firms, UK-based Keyword Group and Bangalore-based Cepha Imaging Systems, for $7 million (approximately Rs 32 crore).

Infomedia will acquire the entire stake of Keyword Group from its promoters and a 21 per cent stake in the Indian company, in which Keyword holds a 49 per cent stake.

"We are in the publishing services space and these acqusitions will enable us to foray into the backoffice publishing sector, banking on our experience in the sector. India has a great talent pool in the publishing sector, which is much ahead of the curve and we intend to utilise this," Prakash Iyer, Infomedia India managing director, said during a press conference here today.

As part of the deal, the company will acquire the remaining 30 per cent stake from the promoters over a period of time. The acquisitions, which are funded from its internal accruals, are subject to regulatory and mandatory approvals.

Keyword was found by Alan Rodwell and Steve Johnson from whom Infomedia acquired it, while Cepha was managed by Benny Karunakaran. While Cepha employs around 220 staff, Keyword has around 40 personnel and mainly utilises the services of freelancers.

The acquired companies will function as independent entities and will help Infomedia consolidate its position in the $250 million publishing BPO market, which has been posting a 30 per cent annual growth, in the country.

Keyword has a strong customer base in the US and company will be used as a front-end after the acquisitions, while Cepha would provide back-end services from India. Infomedia does not intend to shift all the processes to India, with certain important accounts being maintained from US, Iyer said.

Infomedia will also set up marketing and sales front in Europe and ramp-up Cepha's existing capacity in India by adding another 40 to 90 personnel. The company is also mulling of setting up additional facilities in the country, he said, but did not spell out the details stating that were in the "thought process".

The yellow pages and niche magazine publishing major, which had forayed into four new cities in the last six months, is also planning to bring out directories for tier-II cities, like Jaipur, Vijayawada, Chattisgarh and Orissa. At present, the company published directories from 16 locations in the country.

Earlier, Infomedia has entered into a joint venture with Reed Elsevier, a publisher of niche magazines. Under the 51:49 joint venture, the company along with Reed's subsidiary - Reed Business Info - is planning rolling out niche magazines in India.