Essar group-owned Aegis BPO today said it will acquire Philippine-based BPO, PeopleSupport, for $250 million (around Rs 1,050 crore). It announced a definitive agreement to merge with the latter through Essar Services (Mauritius), its wholly-owned subsidiary, and the deal is expected to be concluded by the third or fourth quarter of the calendar year. The strategic combination, to be called Aegis PeopleSupport in the Philippines, has been unanimously approved by the Boards of Directors of both companies.
When completed, Aegis BPO would have acquired 11 firms over the last two-and-half years. The company recently acquired the call centre facility of global internet firm AOL in Bangalore for around Rs 120 crore.
Under the terms of the current agreement, Aegis BPO will pay PeopleSupport stockholders $12.25 per share in cash through Essar Services (Mauritius). Subsequently, the around $320 million Aegis BPO expects to become a $500 million entity by FY10. The combined entity will have an employee base of around 29,000 across the Philippines, India and the US. PeopleSupport's revenue in the last financial year was around $150 million.
Aegis has nine centres in the US. These centres are not for near-shore operations, but are outsourcing centres catering to US clients. Around 67 per cent of Aegis BPO's current revenue comes from the US; the remaining is from India. Following the merger, Aegis BPO will have operations in India, the Philippines, the US and Costa Rica. Aegis BPO expects the merger to help it provide onshore, nearshore and offshore BPO services or a combination of customised solutions to meet client requirements. Additionally, Aegis BPO to offer and benefit from greater scale, deeper domain expertise, a comprehensive and flexible solution offering, financial strength, and a rich international talent pool, according to both managements.
"This is a truly outstanding combination,” said Aparup Sengupta, Global CEO and Managing Director of Aegis BPO. “The addition of PeopleSupport’s high performance operations in the Philippines and Costa Rica will enable Aegis BPO to become a leader in the global BPO market.” Lance Rosenzweig, PeopleSupport CEO and Chairman, said: “PeopleSupport’s solutions bring compelling value to an organization and Aegis’s leadership and market strength can take PeopleSupport to the next level of excellence.”
Going ahead, the company's acquisition strategy would also look at enhancing its nearshore capability. "The focus of the company is now to acquire firms providing services in English-speaking countries. They are looking for acquisition that would give nearshore capability. The company is also looking at the domestic market for acquisition," a senior executive of the company had told this paper earlier.
Related link: Aegis eyes Philippine BPO
