Blackstone buys BPO operations back from Serco for £250 mn
16 September 2015
Private equity firm Blackstone has bought a majority stake in Serco's BPO operations in a £250 mn (Rs2,558 crore) deal, marking the largest such deal for Blackstone in India.
Serco essentially comprises the former Intelenet business that Blackstone sold to Serco for $634 million in 2011. Post acquisition, Serco will again be called Intelenet Global Services.
Serco said the sale of stake was necessitated by a change of strategy for the company.
It proposes to use proceeds from the sale to reduce its net debt. The company, however, clarified that the sale does not include the UK business of Serco Global Services, which would be divested later.
The sale is expected to be completed by December, subject to customary closing conditions and approvals.
''We are excited to embark on the Intelenet 2.0 journey and delighted to once again partner with the company's management team. With a market leading position in the offshore banking and travel / hospitality verticals and #1 position in domestic India BPO, Intelenet has the core platform to capitalise on future growth opportunities,'' Amit Dixit, senior managing director and co-head of Blackstone India, said.
Serco's BPO business, which provides a number of middle and back office services mainly to the financial services, insurance, telecoms, travel and healthcare sectors, has a customer base of international organisations.
Blackstone expects the BPO to have annual revenues of approximately £235m (Rs2,405 crore) for this year. The company has 51,000 full-time employees across 67 centres in eight countries.
''The business however was sold because of change in strategy of Serco which led to the sale of its private sector BPO business. We have retained almost all of our clients and key staff that we have had since our inception and look forward continuing to add value to them,'' Susir Kumar, chief executive of Serco Global Services, said.
Under the terms of the transaction, the business will continue to be led by Susir Kumar, and the existing management team.
Serco Global Services has 100 delivery centers across the US, UK, Europe, India, the Philippines, Australia, Middle East and Africa.