Diversified conglomerate Essar Group said on Monday it has agreed to sell its business process outsourcing business housed under Aegis Ltd to private equity firm Capital Square Partners to cut debt.
This marks Essar Global Ltd’s complete exit from the BPO business, it said in a statement. It didn’t disclose the deal value. However, media reports pegged the deal value around $275-300 million.
The transaction involves AGC Holdings Ltd, a Mauritius-based unit of Essar Global, selling ESM Holdings Ltd, the holding company of Aegis, to the Singapore-headquartered PE firm.
“This transaction is in line with our strategy of incubating, building and operating world-class businesses, and being open to monetizing them at a premium value when the market conditions are favourable,” said Uday Gujadhar, Director-AGC.
Aegis has revenue of around $400 million. It employs more than 40,000 people across 47 centres in 10 countries—India, the UAE, Sri Lanka, Malaysia, Australia, South Africa, Peru, Argentina, Saudi Arabia and the UK.
Essar entered the BPO business in 2004 with the acquisition of the US-based Aegis Communications Group. AGC sold Aegis USA Inc—comprising its operations in the US, the Philippines and Costa Rica—to French firm Teleperformance for $610 million in 2014.
Essar said the latest transaction is likely to close during the first quarter of 2017-18, subject to receiving regulatory approvals and other customary closing conditions.
Axis Capital was the financial adviser to Essar while Platinum Partners and Sidley Austin were the legal advisers. Shearman & Sterling and Shardul Amarchand Mangaldas acted as legal advisors to Capital Square.
Essar’s debt, Capital Square’s deals
Essar Group has been selling assets and businesses to reduce its debt that Credit Suisse last year estimated topped $15 billion. The conglomerate last year agreed to sell its refining arm, Essar Oil Ltd, to a group led by Russian energy giant Rosneft for $12.9 billion, including about $4.5 billion of debt. The deal was targeted to close in March but has been delayed.
Capital Square is a private investment firm floated to deploy principal capital of Singapore-based entrepreneur-turned-investors Sanjay Chakrabarty and Aparup Sengupta. Chakrabarty was the founder and director of MobiApps.
Last year, Capital Square and Indian PE firm CX Partners sold India- and US-based BPO firm The Minacs Group Inc. to US-based Synnex Corporation for $420 million (Rs 2,800 crore then).
In another transaction last year, Capital Square acquired a majority stake in Indecomm Global Services, a Bangalore-based outsourcing services provider.
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