The new feather in the cap for India’s business process outsourcing industry is the acquisition of the Australian BPO firm UCMS by the Essar Group promoted Aegis. The latest acquisition makes Aegis one of the biggest BPO companies of India and a frontrunner among global players. But this is not the single biggest achievement of the firm. They have been growing rapidly over the past few years, and with enough cash flow and years of business acumen to fall back on, Aegis has been able to take giant strides towards success. They have already an enviable list of clientele that includes several Fortune 500 companies. Their global presence has been facilitated by high level of industry expertise, superior quality and a focus on customer satisfaction. The fact that they have been able to engage themselves in various industry verticals including banking and financial services, telecom, healthcare and travel has ensured that their average annualized revenue has today touched a whopping half a billion dollar. NASSCOM ranks Aegis among the top 15 business process outsourcing companies in India. Apart from this new base in Australia, Aegis has several offices spread across the globe in countries like the United States, Costa Rica, the Philippines and in Africa apart from India.
Details of the Deal
The deal was finalized on Tuesday, Aug 11 between the two companies. Aegis managed to close the deal for a handsome AU$ 54 million that roughly translates to around 200 crore rupees. That the Essar group promoted BPO was already in the market for the Australian firm has been in the news for quite a while. In fact the news first broke in May this year when Aegis BPO Services Australia Pty Ltd, an affiliate of Aegis, signed on an agreement according to which Aegis was going to buy all the shares of the UCMS Group in an all-cash transaction. The total equity value for UCMS was fixed at AU$ 54 million according to that agreement. It was this agreement that was sanctified on Aug 11 when Aegis made the all-cash transaction and also obtained all the necessary permissions to close the deal.
The deal ensured that the existing stockholders received AU$ 0.98 for every share they held. And all of this payment was made in cash.
If we look at the logic behind such an acquisition it quickly emerges that this was done mainly for strategic purposes. Quite a few factors played a key role. Although we are going through one of the worst economic turmoil the world has ever seen, Aegis has still managed to grow. It also realizes that this is the time when they need to keep growing and also consolidate at the same time. UCMS Group provided a good opportunity. The economic crisis also made sure that Aegis was able to get the right price for UCMS, which is often not the case when the economy is going through a boom and everything is high priced. But the primary reason that Aegis acquired UCMS was to gain a strong footing in a region; where earlier they were not a major player.