TCS to acquire Phoenix Global

Deal time in BPO alley.

Software powerhouse Tata Consultancy Services (TCS) is acquiring the Bangalore-based Phoenix Global Solutions (PGS), a technology business solutions provider to insurance companies, for an undisclosed sum.

TCS yesterday signed a definitive agreement to acquire PGS, subject to regulatory approvals, a company press release said. If the deal goes through, this will be TCS' fourth acquisition. It earlier acquired CMC as part of the government's disinvestment programme.

Last year, it picked up Airline Financial Support Services from its joint venture partner Swiss Air. This was followed by the acquisition of Singapore Airlines' stake in Aviation Software Development Consultancy.

PGS, with an annual turnover of $12-13 million, is a wholly owned subsidiary of the New York Stock Exchange-listed The Phoenix Companies Inc. As part of its restructuring exercise, the US-based Phoenix put its Indian arm on the block.

TCS had outbid EDS, one of the world's largest third-party BPO and IT solutions companies, in acquiring PGS, sources said. Set up in 1996, PGS has a employee strength of about 350. TCS has a staff strength of over 26,000 employees.

TCS is a division of Tata Sons, the holding company of the Rs 54,000 crore Tata group, which is India's second largest industrial house. It is planning to raise between $700 million and $1 billion from the equity market through an initial public offering (IPO) this financial year.

Commenting on the acquisition, S Ramadorai, chief executive officer of TCS, said: "This acquisition is in line with our focus to consolidate on the strengths developed by TCS over a period of time in the financial industry segments. This will give us an impetus to attract new customers and help grow our existing customers."

The insurance-domain consulting expertise of PGS, which operates from a 6.6-acre campus in Bangalore, would add value to TCS' insurance practice, the release said. Apart from Phoenix, the list of its clients includes Met Life and Swiss Insurance.

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Increased firepower

• This will be TCS' fourth acquisition.
• PGS' insurance-domain expertise will add value to TCS' insurance practice.
• PGS has annual turnover of $12-13 million (Rs 55-58 cr).