Source: Economic Times

A joint bid by Carlyle, a private equity major and serial entrepreneur Ramesh Vangal is set to snap up Cambridge Solutions, one of the largest listed BPO companies, pipping rival bidders like EDS, Apollo and HCL to the post.  Sources affirm Carlyle is expected to buy about 42% of the promoter stake on the block for about $170-million.

This acquisition for which the PE major has joined hands with Mr. Vangal, a co-founder, as well as, the largest individual shareholder in Cambridge with an 18% stake to affect a buyout, will help unveil the Carlyle Group’s biggest investment in India till date.

The joint bid will control around 60% of the stake in the acquired firm valued at around $250-million, and which carries an enterprise valuation of $400-million.  This will be the second largest transaction in the domestic BPO state after Oak Hill and General Atlantic took a 60% stake in Genpact, with the former General Electric Company valued at $500-million.

Carlyle’s move to buy into Cambridge, with the latter having substantial revenues locked up in the insurance processing domain, could unleash synergies given its rather large exposure to the insurance sector in the US.  While, Mr Vangal could keep his equity holding intact and play a more proactive role, it unlikely he will return to the operational structure, he quit last year over differences with the existing promoters.

To be unveiled in the next few weeks after completing formalities, the promoters exiting Cambridge Solutions (formerly Scandent Solutions) include ex-McKinsey honcho Rajat Gupta, former Pepsico chairman Chris Sinclair, US-Canadian Bronfman family of Seagram fame and the Chanderia family.

Earlier this year, Lehman Brothers was mandated by the promoters to find a suitor for their holding.  It is learnt that the bulk of the 59.15% promoter holding, including that of Mr Vangal is jointly held in a Mauritius entity, which is in the process of being unbundled.  While, almost two-thirds of Cambridge’s Rs. 1,200-crore revenue comes from high-end BPO operations spread across the US, India and Europe.  Cambridge also has a strong presence in the lucrative insurance processing domain, with around 2,000 of its total 4,500-employees based in USA.

Five years ago, Mr Vangal together with Rajat Gupta and others, set up Scandent Solutions, a broad-based IT services company, and in 2004 went on to buy Cambridge Integrated Services, a global outsourcing firm and a part of the US-based Aon Corporation for $125-million.  A year later, Scandent Solutions merged with Cambridge Services to form Cambridge Solutions.

It seems mergers & acquisitions are the order of the day for Indian firms, just as a few years ago the trend took over North America.  It remains to be seen how well it works and if it helps to rake in bigger profits.

Source: www.indiaabroad.com

e4e, a business process services and software engineering outsourcing firm, already with two centres in India, now plans to set up a third centre that will have a seating capacity of 500-people, in a secondary Indian city during the 2007-08 fiscal year.

Operating in technical, financial and healthcare domains, e4e with centres in Bangalore, Chennai, US and Scotland, has most of its work bulk handled at its Indian centres, where 3,200 out of e4e’s total global 4,000 staff strength are employed.

Murrali Rangarajan, COO - e4e Inc. talking to the media confirms his firm’s expansion plans for India, as he says: “We are intent on expanding our operations in India since the firm is based on a scaleable model. The third centre will be finalised in the third quarter of the next fiscal. We are keen on setting it up close to colleges. We are considering Pondicherry, Trichy and Coimbatore as possible locations.”

Focusing on data analytics and diagnostics, this 500-seater will be scaled up to seat 1,500-people, subsequently. “The availability of talent is immense in this part of India and we intend to build on it. Besides, we are growing between 32% and 40% year-on-year, fuelling expansion,” he points out.

Presently, working out of six locations in Bangalore, e4e is in the process of consolidating its Bangalore city operations by moving into a single campus. Since the Bangalore centre’s staff works on all domains, e4e prefers operating from a single campus, as it makes it advantageous for it from a logistical point of view, says Rangarajan.

With clients mainly in the US, who account for 95% of the firm’s market, in 2006 e4e services acquired Omni Pros, a business solutions service provider based in California’s Silicon Valley for the purpose of servicing the highly lucrative technology and financial services markets.

According to IDC estimates it is a good move considering the US off-shore IT services market is set to double to an estimated $14.7-billion by 2009. “US markets will continue to drive our growth though the English-speaking areas in APAC are slowly picking up pace,” states Rangarajan, adding that e4e would continue to focus on organic growth, even while looking at the acquisition of suitable companies that come its way.

Source:www.news.ninemsn.com.au

Air New Zealand has again backed away from outsourcing plans, telling finance workers their jobs won’t be moved to India or Fiji.

Air New Zealand had previously announced about 70 finance workers would face the chop, expecting to save about $NZ2 million ($A1.8 million) by sending the jobs overseas.

The company originally hoped to move the jobs to Fiji but after the military coup in the country chose India as an alternative.

“We have now formed a view that India would not meet our requirements, so the outsourcing proposal has been withdrawn and this was communicated to staff earlier this week,” a statement from the airline said.

The backdown comes after the airline earlier this month announced it would not go ahead with plans to outsource the jobs of about 1,700 check-in staff and loading staff to save up to $NZ20 million ($A17.9 million).

That move was abandoned after a deal with unions allowed them to save costs by changing work conditions.

Jill Ovens from the Service and Food Workers Union (SFWU) said the latest move was good news for many of the finance staff.

She said the decision not to push ahead with the outsourcing came because of difficulties in contracting work to other countries, and because of pressure on the airline from the government.

Air New Zealand is 80.4 per cent owned by the New Zealand government.

“I don’t think there is any outsourcing on the table now. Cargo was the other possibility everybody has been talking about, but I don’t think they will do it while we have a Labour government.

“I think it will be a different story next year if National gets in because I think they will sell the shares,” Ovens said.

But Ovens said it was not all good news for the airline’s finance staff, with many already making plans to spend redundancy money they will now miss out on.

“On the basis of getting this redundancy some people had made quite drastic plans for their lives,” she said.

Air New Zealand recently announced a half-year profit of $NZ74 million ($A66.4 million), a 61 per cent jump from a year earlier.

Source: www.indiaabroad.com

Even as the buy out of Dutch ABN Amro by Barclays hit the news stands, British banking giant Barclays’ plans to shift thousands of jobs to India, is just the latest in a series of such decisions by European and American banks, which are expected to hire more than 50,000 professionals in the country, over the next three years.

Taking account of the combined headcount of ABN Amro and UK’s Barclays Plc, it is more than set to expand by over 10,000-employees on the sub-continent following the latter’s $91-billion takeover of the Dutch banking major.

Together with Barclays and ABN Amro, a half a dozen foreign banks, such as, Citigroup, HSBC and Standard Chartered are possibly in line to hire over 50,000-employees in India, across various operations, including back-end jobs that will be moved from high-cost developed countries to low cost ones.

In a bid to expand their presence in the world’s second-fastest growing major economy and benefit from low-cost opportunities in IT enabled back-end operations, foreign banks are going increasingly bullish on their headcount expansion plans in India, according to an industry observer.

During their $91-billion cash and stock merger deal announcement, Barclays and ABN Amro declared they would be moving 10,800 jobs to low-cost locations like India. The deal also means that there will be net reduction of 12,800 jobs from their combined workforce of 2, 17,000 employees.

As a result, sources close to the two firms affirm, this combined entity has the potential to create 8,000-10,000 jobs in India, which includes jobs that will be off-shored from other locations, including previous hiring plans separately announced by Barclays and ABN Amro.

With 2,000 people on its payrolls in India, ABN only last month declared its plans to double this number in a year’s time, while Barclays with close to 1,000 employees in India, said it would be moving over 200-jobs to India after the closure of one of its call centres. Besides, Citigroup, the world’s largest financial services firm, which recently announced a massive reduction of over 17,000 jobs worldwide, is planning to move thousands of jobs to low-cost locations like India. The Indian payrolls of the US bank, which already employs over 22,000-people in the country, is likely to increase by 5,000-8,000 employees following this restructuring.

As well, HSBC, another British banking giant is also planning to increase its headcount in India by taking on an additional 8,000-employees that will take its employee strength to 30,000 by next year. Standard Chartered, another UK-based bank also has major plans to double it’s over 5,000-strong India headcount, within the next three years.

Besides, a number of European banks, such as, Allianz Group’s Dresdner Bank and the Royal Bank of Scotland, the latter one of the suitors for ABN Amro, are also trying to expand their presence in India. Their entry means thousands of new jobs would be created in the sub-continent.

And, apart from the usual B-School graduates, even engineers from institutions like IIT and through out the country are being pursued with offers for a job in a bank. Investment banking, according to a recent survey conducted by A.C. Nielsen and ORG-Marg, has been named amongst the top five industries that students from the country’s premier engineering colleges prefer, while, investment banking giants like Goldman Sachs and Lehman Brothers have been placed amongst the Top 10 most coveted employers.

Source: www.business-standard.com

After acquiring ABN Amro Holdings NV, who along with Barclays, Britain’s third-largest bank has a strong presence in India, there is every likelihood that the latter will shift 10,800 full-time jobs to low-cost destinations, including India.

In a statement issued jointly by Barclays and ABN Amro, the two confirmed the deal is expected to phase out 12,800 jobs over three years, after completing the world’s largest financial services takeover, thus reducing expenses by $3.8-billion.

As well, ABN Amro and Barclays could also see a top-level reshuffle in India. Presently, Mani Subramanium is the CEO of Barclays Bank India, with Samir Bhatia as its Managing Director, India and the Indian Ocean region. And, Romesh Sobti stands as CEO for ABN Amro India.

“Part of the expected staff reduction will be through establishing shared services and off-shoring those positions to low cost locations, such as India, where new staff will be recruited at ABN Amro’s existing ACES operations,” the statement said. ACES is an info-tech operations subsidiary

This means, at present, Barclays Bank and ABN Amro together have a combined workforce of about 2,17,000, comprising 1,23,000 employees for the British bank and 94,000-employees for ABN Amro, while excluding the headcount of LaSalle Corp. In a recent statement the Dutch bank’s officials declared, the Chicago-based LaSalle unit of ABN Amro is to be sold to Bank of America for $21-billion.

Earlier, ABN Amro Bank, who employs about 4,000 back-office workers in six offices in Mumbai, Chennai and New Delhi, had announced its plans to hire 2,000-people in India by end-March 2007.

Analysts proclaim this merger has created a win-win situation for both banks in India, since it was triggered by Barclays’ ambition to increase its exposure in Asia, particularly India, where it is in the process of launching full-scale retail and commercial banking.

Therefore, Barclays, with three branches in India is getting ready for access to ABN Amro’s 28-country-wide branches, a direct result of the merger, including access to ABN Amro’s low cost deposit base of around Rs. 11,864-crore and advances portfolio of Rs. 15,073-crore in India.

On an average, it is to be noted Reserve Bank of India issues foreign banks 12-licences for operating branches on an annual basis. Under such circumstances, the acquisition of ABN Amro has bestowed Barclays with an advantage, when it comes to distribution network.