Business | Technology
India's Essar Group to buy US firm for $250 million
A back-office unit of India's Essar Group has agreed to buy Los Angeles-based PeopleSupport Inc for about $250 million in an all-cash transaction, enabling the Indian firm to tap fast-growing new outsourcing markets.
- Agencies
- Published: 18:22 August 4, 2008
New Delhi: A back-office unit of India's Essar Group has agreed to buy Los Angeles-based PeopleSupport Inc for about $250 million in an all-cash transaction, enabling the Indian firm to tap fast-growing new outsourcing markets.
Aparup Sengupta, CEO of the Essar firm, Aegis BPO, told reporters in a conference call the combined entity saw revenue of about $500 million in the first full fiscal year to March 2010, up from the Indian firm's annual revenue of about $320 million.
PeopleSupport, with delivery centres in the Philippines and Costa Rica, will give Aegis access to the southeast Asian nation, which has attracted Indian back-office firms battling higher wages, expensive property and a stronger rupee.
"We didn't have a Philippines presence," Sengupta said. "It is very complimentary to what we do in terms of geographic presence," he said, adding the acquisition would expand its services portfolio to include travel and transportation.
Under the terms of the agreement, Aegis would pay PeopleSupport stockholders $12.25 per share, 29 per cent higher than the Nasdaq-listed firm's closing price on Friday.
Aegis said it expected the deal to be closed in the next two to three months, after which it would take PeopleSupport private.
The combined entity will have 29,000 employees.
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