Vertex eyeing India buys for growth

UK-headquartered business process outsourcing (BPO) firm Vertex is looking at acquisitions in India. The company, which got acquired by a consortium led by private equity player Oak Hill Capital earlier this year, is looking at rapid organic growth.

"With private equity as an owner, there is always a need to grow rapidly. We are looking at doubling our business in the next five years and also at acquisition opportunities in India," Vertex CEO Richard Graham told ET.

Mr Graham added that Vertex will look at small-and medium-sized companies as acquisition targets. Oak Hill Capital Partners, GenNx360 Capital Partners and Knox Lawrence International acquired Vertex for £217.5 million comprising cash, the repayment of intra-group debt and the retention by the purchaser of certain liabilities of Vertex from UK-based United Utilities.

US-based Oak Hill Capital Partners, which currently has $4.6 billion as assets under management, also has significant business interests in Indian BPO majors Genpact and EXL Services. With both Genpact and EXL Services listing on the US bourses, Vertex may also look at a public floatation at a later stage. “If you are owned by a private equity player, then you know one day you will get sold. It is yet to be decided by when will that happen,” added Mr Graham.

Vertex is also looking to move finance and accounting (F&A) and HR functions to its India back-office in Gurgaon. The company is exploring segments high-end work like engineering support services and IT infrastructure management. New capabilities like security services, data centre management, service desk provision and application maintenance are expected to contribute about 30% of its revenues in the next 12 months.

Recently, it transferred the work it was doing for British telecom major Orange to ExlService. “We don’t want to do plain voice-based, low-end BPO work. We want to do transformational kind of work. The Orange business was voice-based work and we arrived at an agreement with EXL and Orange to transfer that work to EXL. I don’t think we have more of such low-end work on our hands now,” said Mr Graham.

Vertex India has over 1,800 employees at its two Gurgaon centres. The company is also looking at an additional facility in India. The company’s head office is located in Liverpool and it has 9,000 employees based in 66 locations across the UK, US, Canada and India.

(Source: Economic Times