Essar Group BPO operation Aegis has acquired the Nasdaq-listed US offshore BPO provider, PeopleSupport, based in Los Angle in a $250-million deal to combine the acquired firm with itself into a new entity. The deal will be funded through internal accruals of the Essar group.

Aegis, which has acquired 10 other companies in the past four years, will pay PopleSupport shareholders through Essar Services (Mauritius). The merged Aegis PeopleSupport, with 6,500 PeopleSupport employees and 20,000 from Aegis, will have revenue enhancement of $147 million.

PeopleSupport which is focused on travel and consumer, financial, healthcare and insurance, technology and telecom and media had added transcription and captioning services through the acquisition of 'Rapidtext' and 'The Transcription Company' in 2006.

According to a joint statement, Aegis will pay PeopleSupport shareholders $12.25 per share, a 29 per cent premium to the closing share price on 1 August 2008 will equal 1.7 times PeopleSupport's earnings. This buyout will come with a cash reserve of  $160 million, which PeopleSupport currently has.  

 PeopleSupport had revenues of $147 million for the year ended March 2008, and Aegis $320 million for the same period.

With this acquisition, Aegis will have access to PeopleSupport's 15 major US-based clients and its three delivery centers in Philippines and one in Costa Rica thus enabling it to emerge a giant in the international BPO market with onshore, nearshore and offshore BPO services.

Aparup Sengupta, CEO and managing director of Aegis said "Travel, transport and banking are evergreen areas for the BPO business, and with Philippines and its proximity to US culture and language, this buy would give us important leverage in the North American market."
The Costa Rican facility serves clients requiring Spanish and bilingual services.

In order to scale down the high operating cost of the Philippines centers Aegis plans to use it's centralized or shared services structure.

Peoples Support CEO and chairman Lance Rosenzweig who co founded the company in 1998, said, ''PeopleSupport has pioneered the development of offshore BPO in the Philippines and Costa Rica, and we are excited to become a part of a global outsourcing leader. We believe that this combination will deliver superior value to PeopleSupport's stockholders and customers as well as provide our employees with an opportunity to be part of a larger enterprise and to explore career opportunities in new geographies.''