Metavante Corporation is looking to sell its 20% stake in Mumbai-based Firstsource Solutions and has appointed Goldman Sachs to look for a buyer. The first-round bids are expected this month, reports Financial Times. This news comes as the markets have been buzzing with speculations about ICICI Bank planning to sell its 27% stake in Firstsource. Also the other major shareholder in the BPO, Singapore’s Temasek may also look to sell its 21% stake. Interestingly, Warburg Pincus has a 25% stake in Metavante and may look to buy latters stake in Firstsource. Warburg Pincus controls WNS Holdings, which is the second largest BPO in India.
Metavante is a US based technology banking group who is a client of Firstsource. It had picked up stake in Firstsource through primary infusion and secondary purchase in 2006 and later through pre-IPO placements.
India’s major BPO companies are controlled by private equity players. While Blackstone controls Intelenet, WNS Holdings is controlled by Warburg Pincus. India’s largest BPO, Genpact, is controlled by General Atlantic and Oak Hill Capital Partners. All of these will be interested in acquiring Firstsource. While Genpact and WNS are listed in the US, Blackstone could look at a reverse merger with Firstsouce and list the combined entity of Firstsource and Intelenet. Other shareholder in Firstsource is Sequoia Capital, which holds around a 5% stake.
Also WNS has recently acquired captive BPO of insurance major Aviva for $230 million. Another BPO that is for sale in the market is Citigroup Global Services, which is expected to be sold at valuation of around $500-550 million.
Firstsource has in India, US, UK, Argentina and the Philippines and provides services to companies in banking & financial services, telecom, media and healthcare sectors. The company 36 centers and over 18,500 employees in various geographies.