BK Modi-led Spice Group’s plan to set up India’s largest domestic BPO unit by merging its BPO unit with that of Spanco Telesystems and Solutions has fallen through. The merger, announced in October 2008, was called off just a month later in November. This, however, remained under wraps and has come to light now. The three-way merger would have brought together Omnia BPO of Spice, Spanco’s BPO arm and Bharat BPO, the existing joint venture of Omnia and Spanco, which has got the call centre business of Indian Railways. It would have created India’s largest domestic BPO firm in terms of numbers, employing over 10,000 people. The MoU between Spice and Spanco fell through due to differences among the partners over the way the new entity should be managed, according to Kapil Puri, chairman of Spanco. Puri told FE that the two sides could not reach an agreement on how to work together. “Issues over operational management led to the failure. Differences such as appointments to the new board of directors could not be resolved,” he added. However, Dilip Modi, chairman of Omnia BPO Services, while speaking to FE, said that the merger had not fallen through. “We already have a partnership for Bharat BPO and discussions are on. We are taking it step by step. As opportunities present themselves, we will evaluate them,” said Modi. A source connected with the merger said, “Though the terms of the agreement provided for 50:50 management control of the new entity by the parent companies, the Spice group was not in favour of ceding management of the new company.” The disagreement between the two companies–Spice and Spanco–could also spell trouble for their joint-venture firm Bharat BPO. Puri, however, said that currently, there are no plans to go solo and the JV is on track. The unit handles around 20 million calls a day.
“The project is too mission-critical and large to not operate at all, but it could move one way or the other,” said a source in Spanco. Spice was recently in news for pursuing Satyam Computer Services, but later opted out of the race citing that the bidding process was not transparent.
Spice and Spanco had, in October 2008, announced that two companies would invest Rs 500 crore upwards in the new entity, which would be called Omnia till a new name was found for it. Clear expansion plans were announced, which involved increasing the number of seats from then 7,000 to 15,000 by March 2010. The number of employees would also be increased from 10,000 to 15,000 by March 2009, it was announced. Omnia and Spanco continue to operate as separate units now, with Spanco currently employing 6,000 people and having a run rate of Rs 100 crore. Incidentally, the then CEO of Omnia, Pravin Kumar, left the company soon after to join Spanco as its CEO, along with a few more employees of Omnia.
Showing posts with label BPO. Show all posts
Showing posts with label BPO. Show all posts
Monday, April 6, 2009
Monday, March 30, 2009
Hindujas close to acquiring 2 firms
Business process outsourcing company Hinduja Global Solutions (HGSL) is hunting for acquisitions in the UK and the US, despite the global recession and is close to buying two companies, a top official said.“We are very close to acquiring two companies over the next few months, which would be a strategic fit to our existing businesses. These would be contact centres with some amount of voice and data processes,” PaBOtrick David, executive vice- president, global human resources strategy, Hinduja Global Solutions, said without divulging any further details about the acquisition.In 2008, the company’s chief executive officer Partha De Sarkar had said that four companies were short-listed for acquisition and around $110 million cash from internal accruals is earmarked from the purpose. He had also said that a company with revenues of $50 million would be ideal match for HGSL.David added that cash set aside for acquisitions remains the same and the company would be looking at an optimal structure for making the acquisition.Hinduja Global Solutions, part of flagship Hinduja Group, provides outsourcing services in the areas of banking, financial services and insurance, telecom and healthcare. The company employs about 9,500 people in India, which accounts for nearly 65 per cent of its total workforce. Telecom contributes about 80 per cent of the company’s domestic business.On a query on the impact of recession, David said the company has not seen any softening in business from existing clients.
Saturday, March 28, 2009
Lumis Partners Acquires Majority Stake In BPO Firm BNK eSolutions
Lumis Partners, a Delhi-based private equity fund, has picked up a majority stake in BPO firm BNK eSolutions for an undisclosed amount. Sandeep Sinha, managing partner of Lumis Partners, has confirmed this development to VCCircle. The stake has been acquired from the BPO's parent company BNK Capital Markets, a Kolkata-based brokerage. Besides the stake buy, Lumis has also invested an additional amount in the firm for its growth and expansion.
"BNK eSolutions is a very specialised high end BPO firm in areas like IT and healthcare after market services," said Sinha. BNK eSolutions is now looking to expand the its footprint, especially in the US. Also with the deal closed, Lumis is looking for acquisitions for BNK eSolutions for inorganic growth, said Sinha. BNK eSolutions currently has three facilities with nearly a 1,000 employees. Its paid up equity capital of stands at Rs 6.63 crore, according to Economic Times. The BPO is also planning at opening more delivery centers in India, even outside Kolkata. Besides healthcare and IT, BNK eSolutions also has a presence in verticals like education and supply chain management.
"BNK eSolutions is a very specialised high end BPO firm in areas like IT and healthcare after market services," said Sinha. BNK eSolutions is now looking to expand the its footprint, especially in the US. Also with the deal closed, Lumis is looking for acquisitions for BNK eSolutions for inorganic growth, said Sinha. BNK eSolutions currently has three facilities with nearly a 1,000 employees. Its paid up equity capital of stands at Rs 6.63 crore, according to Economic Times. The BPO is also planning at opening more delivery centers in India, even outside Kolkata. Besides healthcare and IT, BNK eSolutions also has a presence in verticals like education and supply chain management.
Monday, September 3, 2007
1.Broad Sector Themes
We will be posting articles on each of these themes soon. Readers can also send in their comments/articles to h.sandeep.reddy@gmail.com and i will post them on the blog with due attribution.
Friday, August 31, 2007
Apollo Health buys US BPO for Rs 697cr
Hyderabad-based Apollo Health Street (AHS), a Apollo Hospitals Group (AHG) subsidiary, made its second US acquisition by acquiring Atlanta-based business process outsourcing (BPO) and enterprise solutions company Zavata Inc for Rs 697 crore.
“The Zavata acquisition will enable us to enhance offerings to our customer base and aid in increasing client base. With this acquisition, we will be able to position ourselves as one of the biggest global healthcare outsourcing companies,” Prathap C Reddy, chairman, AHG said.
The acquisition, the fourth for AHS, will be funded by raising a debt of $135 million from Bank of India and Barclays Capital. AHG, which held 47% in AHS pre-merger, has invested around $25 million to retain the same holding in the merged entity.
Sangita Reddy said the addressable US outsourcing market which could be effectively utilised is around $30 billion and $48 billion in the payer and provider segments respectively.
(Source: Business Standard
“The Zavata acquisition will enable us to enhance offerings to our customer base and aid in increasing client base. With this acquisition, we will be able to position ourselves as one of the biggest global healthcare outsourcing companies,” Prathap C Reddy, chairman, AHG said.
The acquisition, the fourth for AHS, will be funded by raising a debt of $135 million from Bank of India and Barclays Capital. AHG, which held 47% in AHS pre-merger, has invested around $25 million to retain the same holding in the merged entity.
Sangita Reddy said the addressable US outsourcing market which could be effectively utilised is around $30 billion and $48 billion in the payer and provider segments respectively.
(Source: Business Standard
Thursday, August 30, 2007
Firstsource Solutions buys MedAssist for $330 mn
As reported earlier, the deal has gone through.
In the second-largest takeover of an overseas business process outsourcing (BPO) firm by an Indian company, Firstsource Solutions has announced the acquisition of US-based MedAssist for $330 million. This is the third acquisition for Firstsource in the US, and its seventh in all.
The news drove up Firstsource shares nearly 10% to Rs 79.40 on BSE on Wednesday.
With revenues of $99 million in 2006, Louisville, Kentucky-based MedAssist is among the largest firms providing revenue cycle management services to the healthcare sector in the US. The buyout will give Firstsource a footprint in the hospital side of the healthcare business.
The deal values MedAssist at 12.5 times its 2007 operating profit, Firstsource CFO Rajesh Subramaniam said. MedAssist’s revenues have been growing at 7-10% annually, and its core earning margins are higher than most US firms at 22-24%. “We see significant opportunity to grow our business in the segment by cross-selling our services to MedAssist’s customers,” Firstsource managing director and CEO Ananda Mukerji said.
(Source: Economic Times)
In the second-largest takeover of an overseas business process outsourcing (BPO) firm by an Indian company, Firstsource Solutions has announced the acquisition of US-based MedAssist for $330 million. This is the third acquisition for Firstsource in the US, and its seventh in all.
The news drove up Firstsource shares nearly 10% to Rs 79.40 on BSE on Wednesday.
With revenues of $99 million in 2006, Louisville, Kentucky-based MedAssist is among the largest firms providing revenue cycle management services to the healthcare sector in the US. The buyout will give Firstsource a footprint in the hospital side of the healthcare business.
The deal values MedAssist at 12.5 times its 2007 operating profit, Firstsource CFO Rajesh Subramaniam said. MedAssist’s revenues have been growing at 7-10% annually, and its core earning margins are higher than most US firms at 22-24%. “We see significant opportunity to grow our business in the segment by cross-selling our services to MedAssist’s customers,” Firstsource managing director and CEO Ananda Mukerji said.
(Source: Economic Times)
Thursday, August 23, 2007
FirstSource in advanced talks on $300 mn US buy
A leading Indian pure-play business process outsourcing (BPO) firm, FirstSource Solutions, has emerged as the frontrunner in the quest to buy the US-based healthcare player MedAssist.
The deal size, sources say, is close to $300 million (around Rs 1,200 crore). If it materialised, it would be one of the largest overseas acquisitions after Wipro’s buyout of Infocrossing for around $600 million and the largest in the BPO space, they added.
Sources close to the deal say there is one more serious contender in the race for MedAssist, which has revenues of $90-100 million and provides patient services, eligibility services, patient financing and healthcare collections. It has around 1,400 employees and 950 healthcare providers as clients.
FirstSource is also rumoured to be in the race to acquire Citi’s BPO unit after the first round of bidding. The sale of the BPO business, being run by Citigroup Global Services (formerly eServe), is expected to fetch Citi around Rs 3,200 crore.
During its initial public offering (IPO) in January, the FirstSource management had indicated that the company intended to use the net proceeds of the issue for acquisitions, setting up facilities, repaying loan and general corporate purposes. Out of the proceeds of the IPO, the company plans to spend approximately Rs 180 crore on acquisitions.
(Source: Business Standard)
The deal size, sources say, is close to $300 million (around Rs 1,200 crore). If it materialised, it would be one of the largest overseas acquisitions after Wipro’s buyout of Infocrossing for around $600 million and the largest in the BPO space, they added.
Sources close to the deal say there is one more serious contender in the race for MedAssist, which has revenues of $90-100 million and provides patient services, eligibility services, patient financing and healthcare collections. It has around 1,400 employees and 950 healthcare providers as clients.
FirstSource is also rumoured to be in the race to acquire Citi’s BPO unit after the first round of bidding. The sale of the BPO business, being run by Citigroup Global Services (formerly eServe), is expected to fetch Citi around Rs 3,200 crore.
During its initial public offering (IPO) in January, the FirstSource management had indicated that the company intended to use the net proceeds of the issue for acquisitions, setting up facilities, repaying loan and general corporate purposes. Out of the proceeds of the IPO, the company plans to spend approximately Rs 180 crore on acquisitions.
(Source: Business Standard)
Wednesday, June 20, 2007
Citi seeks $750 mn for 80% of BPO arm
Citigroup is keen on selling an 80% stake in Mumbai-based captive business process outsourcing (BPO) arm Citigroup Global Services (formerly eServe International) for $700-750 million (Rs2,870-3,075 crore) and is in advanced negotiations with leading private equity investors for an all-cash deal.
a private equity investor is most likely to emerge as the buyer and strategic suitors, such as IBM Corp. and Tata Consultancy Services Ltd, (TCS) are likely to drop out of the race over terms being proposed by the seller. Unlike the Genpact deal, Citi is not willing to commit long-term business to the captive once a new shareholder comes in. Neither IBM nor TCS would be willing to put so much cash down without that commitment. When General Electric Co sold 60% in its Gurgaon-based captive BPO to PE firms General Atlantic and Oak Investment for $500 million, it also threw in a multi-year outsourcing contract as part of the deal.
(Source: Mint)
a private equity investor is most likely to emerge as the buyer and strategic suitors, such as IBM Corp. and Tata Consultancy Services Ltd, (TCS) are likely to drop out of the race over terms being proposed by the seller. Unlike the Genpact deal, Citi is not willing to commit long-term business to the captive once a new shareholder comes in. Neither IBM nor TCS would be willing to put so much cash down without that commitment. When General Electric Co sold 60% in its Gurgaon-based captive BPO to PE firms General Atlantic and Oak Investment for $500 million, it also threw in a multi-year outsourcing contract as part of the deal.
(Source: Mint)
Monday, June 18, 2007
Intelenet sold in country’s largest management buyout
In the largest management buyout (MBO) in the country, the management team of BPO firm Intelenet, backed by PE firm Blackstone, has bought out the existing promoters, Barclays Bank Plc and HDFC. Under the terms of the deal concluded on Sunday morning, Blackstone will hold 80% in the firm and employees, including the current management team, will hold 20%.
Sources pegged the value of the deal in the region of $200 million. ET had reported the value of the deal and that Blackstone was close to clinching it on Saturday. No official confirmation was available on the deal value, because Blackstone is in the silent period. Around 300-400 employees in the senior management of Intelenet will become shareholders in the firm once the transaction is completed
The deal values Intelenet at over two times its FY07 sales of around Rs 380 crore, compared with the over 3x sales valuation of EXL (March 07 annualised) and WNS. In terms of the employees, the 6-year-old firm is the third largest thirdparty BPO firm in the country with around 17,000 employees.
Interestingly, Barclays, which will now exit firm as a shareholder, will continue as a ‘long term’ client for the businesses it currently outsources to Intelenet. It will also set up its own captive in the Delhi with the help of the Intelenet management team. HDFC, which was one of the original promoters, seems to have taken a strategic decision to exit the firm, unlike ICICI which took its BPO firm — Firstsource— to IPO this year. The value of HDFC stake has increased nearly three times since 2004. In 2004, Tata Consultancy Services’ 50% stake in Intelenet got it $35 million.
(Source: Economic Times)
Sources pegged the value of the deal in the region of $200 million. ET had reported the value of the deal and that Blackstone was close to clinching it on Saturday. No official confirmation was available on the deal value, because Blackstone is in the silent period. Around 300-400 employees in the senior management of Intelenet will become shareholders in the firm once the transaction is completed
The deal values Intelenet at over two times its FY07 sales of around Rs 380 crore, compared with the over 3x sales valuation of EXL (March 07 annualised) and WNS. In terms of the employees, the 6-year-old firm is the third largest thirdparty BPO firm in the country with around 17,000 employees.
Interestingly, Barclays, which will now exit firm as a shareholder, will continue as a ‘long term’ client for the businesses it currently outsources to Intelenet. It will also set up its own captive in the Delhi with the help of the Intelenet management team. HDFC, which was one of the original promoters, seems to have taken a strategic decision to exit the firm, unlike ICICI which took its BPO firm — Firstsource— to IPO this year. The value of HDFC stake has increased nearly three times since 2004. In 2004, Tata Consultancy Services’ 50% stake in Intelenet got it $35 million.
(Source: Economic Times)
Wednesday, June 13, 2007
Apollo eyes UK's Bupa chain buyout
The Apollo hospitals group is on an acquisition mode. The group wants to acquire UK based Bupa chain of hospitals, which is valued at an estimated $2.4 billion.
Apollo's recent plans to acquire other hospitals in the US and UK fell through primarily on account of valuation issues. In a bid to expand its IT and healthcare arm, the group plans to acquire a healthcare BPO unit in the US for about $100 million.
(Source: ET)
Apollo's recent plans to acquire other hospitals in the US and UK fell through primarily on account of valuation issues. In a bid to expand its IT and healthcare arm, the group plans to acquire a healthcare BPO unit in the US for about $100 million.
(Source: ET)
Fujitsu eyes Mumbai BPO
After its exit from a partnership with RPG company Zensar, Fujitsu India CEO Mikito Kiname said his company will start from scratch to rebuild its presence in India. The company is believed to be interested in buying Mumbai-based BPO Intelenet, in addition to having plans to scale organically.
Vinod Dham picks up 25% stake in ISGN
NRI venture capitalist Vinod Dham’s New Enterprise Associates (NEA) has picked up a minority stake in KK Birla-promoted mortgage BPO ISGN for about $25 million. According to market sources, the VC has picked up about 22-25% in ISGN, valuing it at about $100 million.
ISGN is the third largest mortgage servicing KPO in US after Fidelity and Fiserve. In the US loan origination software market, however, it claims to the largest in with a share of 18%.
ISGN said it will use the proceeds from New Enterprise Associates to help it expand inorganically. ISGN is on an acquisition spree. In May, this year, ISGN bought US-based Dynatek. In March, the company acquired the mortgage division of US-based Fair Isaac Corporation for an undisclosed sum. The company is looking for buyouts in mortgage servicing and default management space in India.
(Source: ET)
ISGN is the third largest mortgage servicing KPO in US after Fidelity and Fiserve. In the US loan origination software market, however, it claims to the largest in with a share of 18%.
ISGN said it will use the proceeds from New Enterprise Associates to help it expand inorganically. ISGN is on an acquisition spree. In May, this year, ISGN bought US-based Dynatek. In March, the company acquired the mortgage division of US-based Fair Isaac Corporation for an undisclosed sum. The company is looking for buyouts in mortgage servicing and default management space in India.
(Source: ET)
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