Birlas Minacs plans Europe M&As

Written by Rachana Khanzode | Mumbai | Updated: Oct 18 2010, 21:20pm hrs
Business process outsourcing (BPO) firm Aditya Birla Minacs, wants to expand to Europe through acquisitions, a senior company official said. The company has been keenly looking for acquisitions to expand into healthcare and public sector verticals.

At the moment, our priority is to build capabilities in core business process in the healthcare and public sector verticals. If we get a firm with a European base it would be an added advantage, said Deepak Patel, CEO, Aditya Birla Minacs. However, getting into Europe is not a priority at the moment. We may look at it as another acquisition.

Minacs has been trying to buy a BPO firm for quite some time now with a US focus in the healthcare and public sector verticals. Even though number of companies in the domestic market are up for sale, Minacs hasnt yet decided on one. Finding a company in India is not so difficult but the valuations are quite high. Especially, the pure-play healthcare firms are pricey, Patel added. Firstsource, 3i-infotech and Patni Computer Systems are some of the Indian firms open to stake sale, according to various media reports.

Minacs, which is backed by Aditya Birla Nuvo, does not have issues regarding funding, said Patel. The company has a $170-million debt with debt to equity ratio of 2.1:1, according to Patel. Funding is not an issue but it has to be a material transaction. The company has earlier said it wants to grow inorganically to a $1-billion firm in the next three years before it goes for an Indian IPO.

It is also looking at expanding its base in the US market and will be opening up a new centre in Michigan with a 600 seat capacity. We have got a client for the capacity. However, we would start up adding few hundred people initially, Patel said. Minacs also has a seat capacity of 6,500 in North America, however, 45% of it is unoccupied. The leasing cost is an additional burden for us which we got inherited through the acquisition. So we are trying to add more people and some of these leases are getting expired, which is expected to reduce our cost levels in the coming quarters, he added.

Minacs, which had a revenue of Rs 1,520 crore (approximately $350 million) in 2009-10, continues to see strong pipeline of deals, worth about $1 billion, to be executed over the next two-three years. In 2009-10 Minacs closed deals worth $640 million of total contract value.