Essar to sell BPO Aegis to Capital Square Partners for $300 million
BENGALURU: Essar said it will sell its business process outsourcing company Aegis to private equity firm Capital Square Partners as the conglomerate looks to pay off debt. The deal is valued at about $300 million, said a person with direct knowledge of the matter.
Aegis had revenue of about $400 million and over 40,000 employees at the time of the agreement. The BPO company has 47 centres across 10 countries.
Essar had previously sold Aegis operations in the US, Philippines and Costa Rica to Teleperformance for $610 million. In total, Essar has made over $900 million from the sale of its BPO.
“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,” said Uday Gujadhur, director at AGC, the holding company for Aegis and a fully-owned portfolio company of Essar Global.
Last year, Capital Square Partners and CX Partners exited BPO firm Minacs for $420 million. Aparup Sengupta, one of Capital Square’s operating partners, is the former CEO of Aegis.
“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 our sector knowledge and expertise,” Sanjay Chakrabarty and Mukesh Sharda, managing partners of CSP, said jointly.
Aegis CEO Sandip Sen said one of the reasons for the sale was to give the BPO access to more capital.
“The deal is really for the three Cs – capital, capabilities and connections. With CSP, we have the flexibility to make inorganic acquisitions, especially in the US and Philippines markets,” Sen said.
Aegis had stepped away from the lucrative US market after it sold its business in that region to Teleperformance. Sen said the company could look at re-entering the Philippines by the end of this financial year, after a non-compete agreement ends.
Sen added that there would be no changes at the management level at Aegis and the company will continue to invest in growth plans – which involve tapping startups to access innovative technologies.
“We are actually creating an accelerator in Bengaluru where we will work with five or six startups around go-to-market strategies. We will also have the right of first refusal when it comes to investments,” Sen said.
Axis Capital was Essar’s financial advisor and Platinum Partners and Sidley Austin were the legal advisors. Shearman & Sterling and Shardul Amarchand Mangaldas acted as legal advisors to CSP.
The transaction is expected to close during the first quarter of FY18, subject to regulatory approvals and other customary closing conditions.
Aegis had revenue of about $400 million and over 40,000 employees at the time of the agreement. The BPO company has 47 centres across 10 countries.
Essar had previously sold Aegis operations in the US, Philippines and Costa Rica to Teleperformance for $610 million. In total, Essar has made over $900 million from the sale of its BPO.
“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,” said Uday Gujadhur, director at AGC, the holding company for Aegis and a fully-owned portfolio company of Essar Global.
Last year, Capital Square Partners and CX Partners exited BPO firm Minacs for $420 million. Aparup Sengupta, one of Capital Square’s operating partners, is the former CEO of Aegis.
“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 our sector knowledge and expertise,” Sanjay Chakrabarty and Mukesh Sharda, managing partners of CSP, said jointly.
Aegis CEO Sandip Sen said one of the reasons for the sale was to give the BPO access to more capital.
“The deal is really for the three Cs – capital, capabilities and connections. With CSP, we have the flexibility to make inorganic acquisitions, especially in the US and Philippines markets,” Sen said.
Aegis had stepped away from the lucrative US market after it sold its business in that region to Teleperformance. Sen said the company could look at re-entering the Philippines by the end of this financial year, after a non-compete agreement ends.
Sen added that there would be no changes at the management level at Aegis and the company will continue to invest in growth plans – which involve tapping startups to access innovative technologies.
“We are actually creating an accelerator in Bengaluru where we will work with five or six startups around go-to-market strategies. We will also have the right of first refusal when it comes to investments,” Sen said.
Axis Capital was Essar’s financial advisor and Platinum Partners and Sidley Austin were the legal advisors. Shearman & Sterling and Shardul Amarchand Mangaldas acted as legal advisors to CSP.
The transaction is expected to close during the first quarter of FY18, subject to regulatory approvals and other customary closing conditions.
