The Essar Group on Monday announced the sales of its BPO company Aegis to Singapore-based private equity fund manager Capital Square partners for an estimated $275-300 million. With this the Group has exited from the BPO business. “AGC Holdings (AGC) Mauritius, a wholly-owned portfolio company of Essar Global, has entered into a definitive agreement with Capital Square Partners (CSP) to sell 100% of its stake,” a company statement said. Though the company did not give the value of the deal, sources said the sale could be in the range of $275 to $300 million. “Net proceeds of this sale will be used to retire Essar’s debt,” the statement said adding the transaction is likely to close by June 2017 subject to regulatory approvals and other customary closing conditions.
Essar had in July 2014 sold Aegis USA Inc, an outsourcing and technology company with operations in the US, the Philippines and Costa Rica, to Teleperformance of Paris for $610 million. With its US subsidiary gone, Aegis’ headcount and revenue were reduced substantially. Since then, Aegis has again grown the business in terms of headcount, revenues, product offerings and customer base, the statement said.
Aegis had BPO business globally across India, Sri Lanka, Malaysia, Australia, South Africa, Peru, Argentina, Saudi Arabia and the UK. It had 40,000 employees globally, 47 BPOs in these 10 countries and $400 million in revenue.
Essar entered the BPO business in 2004 with the acquisition of the US-based Aegis Communications Group, with 2,000 employees. Uday Gujadhar, director-AGC, said: “This transaction is in line with our strategy of incubating, building and operating world-class businesses, and being open to monetising them at a premium value when the market conditions are favourable.”
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Sanjay Chakrabarty and Mukesh Sharda, managing partners of CSP, jointly said: “We are excited about the opportunity to work with the Aegis management team in embarking on the next stage of growth, by focusing on innovation and adding oursector knowledge and expertise.” Sandip Sen, managing director, Aegis said: “Aegis has established itself as a high value service provider to its customers. We shall continue to provide quality service to our esteemed customers and be an employer of choice.”
Essar’s advisors in the transaction include Axis Capital as financial advisor, and Platinum Partners and Sidley Austin as legal advisors. Shearman & Sterling and Shardul Amarchand Mangaldas acted as legal advisors to CSP.