Hinduja Global Services (HGS), the business process outsourcing arm of Hinduja Group, has inked a deal to acquire a significant portion of HP-controlled IT services firm Mphasis Ltd's India business for a paltry Rs 17 crore ($2.7 million).
It has entered into definitive agreements with Mphasis and its wholly owned subsidiary MsourcE India Pvt Ltd for acquisition of a significant portion of their Business Process Outsourcing (BPO) business as a going concern on a slump sale basis. HGS said it has bought about 60 per cent of India business of Mphasis.
HGS will add Mphasis’ 7,000 employees and six BPO delivery centres servicing telecom and banking-financial services-insurance (BFSI) sectors to its fold through this acquisition.
The delivery centres are located at Noida, Raipur, Indore, Mangalore, Pune and Bangalore.
Ganesh Ayyar, CEO of Mphasis, said this sale would help the company intensify its focus on its IT and IT enabled services such as digital, governance risk and compliance, application maintenance and services.
Mphasis said the transaction will not lead to job loss or headcount reduction.
“This acquisition is opportunistic and fits well into our growth plans. It adds scale and a wider footprint even as we enhance our capabilities and gain an outstanding team of domain specialists to cater to our clientele,” said Partha DeSarkar, chief executive officer of HGS.
HGS, which is ranked ninth among India’s business process management companies, reported a 12 per cent rise in revenue to Rs 2,807 crore for the year ended March 31, 2015. Its net profit declined marginally in the same period.
Global tech major HP, which owns 60.45 per cent in Mphasis, has been looking to divest its stake for a few years and engaged in discussions with many PE players.
However, it did not manage to seal a deal.
In March, Hinduja Global acquired 89.9 per cent stake in US-based sales automation and CRM solutions provider to health insurance sector Colibrium. This came almost three years after it acquired healthcare revenue cycle outsourcing business EBOS (Extended Business Office Solutions) from Deloitte Consulting LLP and Deloitte Consulting Extended Business Services LLC.
With the latest deal, it seems to be looking aggressively at an inorganic expansion strategy.
Early this year, private equity firm Apax Partners had picked a small stake in the company through a secondary market transaction.
HGS shares last changed hands at Rs 486.87 each, down 0.86 per cent on BSE in a strong Mumbai market on Tuesday. Mphasis scrip was up 5.84 per cent and ended the day at Rs 410 a share. The announcement was made after market hours.