Essar Group’s privately held business process outsourcing (BPO) business Aegis Ltd is selling its operations in the US, Philippines and Costa Rica to French company Teleperformance for $610 million.
The business to be acquired represents total annual revenue of $400 million and more than 19,000 full time employees across 16 centres in the three countries, serving multiple premium clients in various key growing industries in the US market.
AGC Holdings Limited (Aegis ), a wholly owned portfolio company of Essar Global Fund Limited, said post the asset divestment it would retain the remainder of the BPO business globally across India, Sri Lanka, Malaysia, Australia, South Africa, Peru, Argentina, Saudi Arabia and the UK.
Uday Gujadhur, board member, Essar Capital Limited, fund manager for Essar Global Fund, said, “This transaction fits the strategic objectives of Essar Fund in the rapidly growing high quality assets and delivering value creation, in this case through a sale to a high quality strategic player like Teleperformance. This transaction will also yield many synergies and benefits for Aegis’ employees and esteemed customers. We look forward to continue to grow the Aegis portfolio in our other markets, including India, Malaysia, Australia, Middle East, Europe and Latin America.”
Although Aegis does not give country specific financials, the assets being sold represent around 40 per cent of total revenues and a little over a third of total employees for Aegis.
The transaction, which is not subject to a financing condition, is expected to close in the current quarter subject to regulatory approvals.
Daniel Julien and Paulo César Salles Vasques, executive chairman and CEO, respectively, of Teleperformance, said in a joint statement: This will be an historic transaction for the Teleperformance’s shareholders as this acquisition fits perfectly with our long-term strategy.”
They added that the deal will push total global revenues of Teleperformance to around $4 billion on a pro-forma basis.
The acquisition will strengthen its presence in the healthcare, financial services, travel and hospitality verticals in the US, thereby accelerating the diversification of its business portfolio.
The firm said the deal will create immediate value for Teleperformance shareholders as it will be accretive to earnings per share by above 10 per cent starting from 2015, with consolidated EBITA margin exceeding 10 per cent.
Teleperformance ended 2013 with consolidated revenue of €2,433 million ($3,236 million). Before this deal, the Group operated 110,000 computerised workstations, with close to 149,000 employees across around 230 contact centres in 62 countries and serving more than 150 markets. It manages programmes in 63 languages and dialects on behalf of major international companies operating in a variety of industries.
For Aegis, the deal marks a significant divestment and comes amidst talks of proposed sale of its Indian unit as well.
(Edited by Joby Puthuparampil Johnson)