Stream Global merges with eTelecare

New York-listed Stream Global Services, Inc. and eTelecare Global Solutions Inc. will merge to create a global business process outsourcing (BPO) leader in over 20 countries including the Philippines. Stream and Ayala-backed EGS Corp. entered in a stock-for-stock agreement that will propel the combined entity with $1 billion in revenues next year, Stream and LiveIt Investments Ltd. said in separate statements. LiveIt is the Ayala Corp.’s BPO investment company that will own 25.5 percent of the combined company along with Ares Management LLC and Providence Equity Partners LLC at 45.5 percent and 17 percent, respectively. Ayala Corp. president Fernando Zobel de Ayala said the combination of a “world class" company like Stream and “Philippine leader" like eTelecare would create “one of the largest and most competitive" companies in the global BPO industry. “The combination also underscores our belief that the Philippines is playing an increasingly critical role in the outsourcing strategies of global clients, due to its many advantages, such as a large and high quality workforce and robust infrastructure," he added. Stream and EGS Corp. stockholders will own approximately 57.5 percent and 42.5 percent, respectively, of the combined entity Stream and eTelecare generated revenues of $523 million and $299 million, respectively, in 2008 with some 30,000 employees in 50 solution centers in North America, Europe, the Philippines, Latin America, India, the Middle East and Africa. The company will operate under the Stream Global Services name globally, and under the eTelecare brand in the Philippines with broadly diversified Fortune 1000 customer base. In a telephone interview, LiveIt director for investment management Leny Salumbre said eTelecare brand would be retained in the Philippines for hiring purposes. “eTelecare has a better mileage (in the Philippines). The combination will try to create a big player. The best way is to move up in the competition. The merger is complementary to the growth we are having right now," she told GMANews.TV. The combined entity will employ approximately 10,000 from eTelecare and 1,500 from Stream in the Philippines. Gilbert Santa Maria, who will continue to lead eTelecare’s Philippine operation, said there would be more career opportunities and more jobs for the country aside from stronger revenue growth. “We are very positive about this combination as it will strengthen our presence in the Philippines, and enhance our ability to achieve industry leading service levels and operating efficiencies for our clients," he said. With a strong balance sheet, the company can make future investments in technologies, new service offerings for its clients and new geographic locations such as China, Brazil and Japan. -Ruby Anne M. Rubio, GMANews.TV