Aegis, the business process outsourcing (BPO) arm of the Essar Group, has offered to buy out the Nasdaq-listed BPO firm ICT Group. Aegis plans to acquire the firm at $127 million (Rs 640 crore), paying $8 a share in cash. The offer price is at a premium of approximately 71% over the 30-day average closing price of ICT Group shares and about 122% premium above the closing price as of February 27. The shares of ICT Group closed at $5.91, up by more than 64% as compared to its previous close.
ICT Group reported a net loss of $23.3 million in 2008 and total revenues of $428.2 million compared to $453.6 million in the previous year. It currently has operations in North America, Europe, Latin America, Australia, India and the Philippines. Nearly 50% of the company’s revenues are from the finance vertical, and other verticals where it has a significant presence are telecom/technology and healthcare/pharmaceuticals.
ICT Group’s clients include HSBC, Citi, Johnson & Johnson, AT&T, etc. while the top five clients contribute to 33% of revenues, top 10 account for 47% of the revenues. As of December 31, 2008, the company had $31 million in cash and cash equivalents.
The announcement of this deal by Aegis comes after it acquired Los Angeles-based PeopleSupport in October 2008 for $250 million. With the deal with ICT Group, Aegis plans to bring in clients, expand geographic footprint and an increase in scale of operations. “The combined business will offer a wider set of services and solutions to both companies’ clients, enabling us to broaden and deepen our relationships with them,” said Aparup Sengupta, Managing Director and Global CEO of Aegis in a release.
The deal is still subject to customary due diligence, negotiation and execution of a mutually agreeable definitive agreement, and completion of required regulatory approvals.