A $200-Million Indian BPO Firm Buyout
posted in Outsourcing News and Top Outsourcing deals |Source: www.business-standard.com
Led by Blackstone, the world’s largest private equity fund, a consortium in a management buyout, has purchased the entire shareholding of Housing Development Finance Corporation (HDFC) and Barclays Bank in Mumbai-based BPO – Intelenet Global Services. Although, no confirmation is available regarding the deal amount, sources claim the pegged at $200-million (Rs. 820-crore) BPO deal, will be the largest of its kind in the country.
Together with Intelenet’s management team, SKR BPO Services, a Blackstone special purpose vehicle will acquire the shares, to be jointly owned by Intelenet and Blackstone. With the same management team in charge of handling operations, it will be a seamless change of ownership, with business as usual for all stakeholders. Employing 17,000-people in 18-office across India and overseas, Intelenet boasts a roster of 60-Indian and international clients.
Established in 2004, the Barclays and HDFC 50:50 joint venture has gross assets worth $107-million (around Rs. 410-crore). With the completion of the transaction, Intelenet will continue to provide services to Barclays, in relation to certain processes currently off-shored to India, as well as, assist Barclays in establishing a wholly owned BPO operation in India, for serving any incremental off-shoring Barclays requirements.
In addition, the consortium also proposes to make an open offer for Sparsh BPO, in which Intelenet has a 51% stake, and has made an offer of Rs. 200/- for every Sparsh BPO share, for a total offer of approximately Rs. 64.59-crore.
According to analysts this could be a first step towards a private equity player led consolidation of the domestic BPO industry. A Mumbai-based official from Deloitte, the PE advisory services firm confirms, saying: “All the top private equity players are active in India. But, we have not seen much major transaction in the country, where a PE player buyout the entire company, turn it around and exit it with a huge amount of money. Blackstone’s move can be considered as a step in that direction.”
Started in 1994, Intelenet began life as a 50:50 joint venture, between Tata Consultancy Services (TCS) and HDFC. Deciding to focus on its own BPO business, in 2004 TCS sold off its stake to HDFC for Rs. 161-crore in total. Subsequently, HDFC too sold a 50% stake to the UK-based Barclays, who at the time was looking to outsource back-office processes to India.
