Indian outsourcing firm acquires US-listed contact center operator

MANILA, Philippines - Aegis BPO, an Indian outsourcing company, has agreed to buy Nasdaq-listed PeopleSupport, Inc. for $250 million, a transaction that includes the acquired company’s Philippine operations. In a statement, PeopleSupport said the acquisition will be made through Aegis BPO’s wholly-owned subsidiary Essar Services (Mauritius) which is part of the Essar Group of India which also has businesses in shipping, energy, steel, and construction. The statement added that Essar Services and PeopleSupport, which are both into business process outsourcing (BPO), have signed a definitive agreement to merge subject to US regulatory rules and shareholder approval. Aegis BPO will pay PeopleSupport $12.25 per share, lower than the offer of IPVG Corp. at $17 per share but approximately 29 percent more than PeopleSupport’s closing share price last August 1. PeopleSupport rejected IPVG’s offer after noting that the offer was “inadequate and fails to take into account PeopleSupport’s strategic value and success in implementing its growth strategy." In a press conference on Tuesday, PeopleSupport Philippines President Bong Borja said the merger will result in a $500 million company since Aegis BPO is currently has annual revenues of $320 million while PeopleSupport is expected to make some $160 million this year. “The merger will complement PeopleSupport’s offerings and strategies" which are currently mainly voice services, or call center support. With the acquisition, PeopleSupport can leverage on the strengths of Aegis BPO which include back office support, software development, and collections. It will also enable PeopleSupport to access larger markets, including India and Europe, and expand in the US where PeopleSupport has minimal presence, added Borja. The Philippine operations will be renamed as Aegis PeopleSupport but this merged entity is not expected to be in existence until after three months. In the meantime, PeopleSupport Philippines will remain in status quo with Borja still as its head. PeopleSupports’ offshore operations have mainly been focused in the Philippines with 7,000 seats located in sites in Makati City and Baguio City. There are about 500 seats in Costa Rica. In comparison, Aegis BPO has 25 delivery facilities in the US and India for a total of 14,000 seats, making it one of the largest offshore BPO companies in India. - GMANews.TV