In a move that will see private equity major Blackstone making a windfall from one of its Indian investments, French back office services company, Teleperformance, on Wednesday said that it would acquire business process outsourcing (BPO) services company, Intelenet Global Services for $1 billion (around Rs 68 billion).
One of the earliest investors in Intelenet, Blackstone first made an investment of $200 million in the Mumbai-based company in 2007 and exited in 2011 selling its entire stake to UK-based Serco Group for around $540 million clocking a 3X return on USD terms.
In 2015, the PE firm again brought back Intelenet from Serco for $352 million (Rs 25.6 billion) with a mix of debt and equity funding and is exiting now at $1 billion which is a four times return on the equity funding it made into the company.
“We have invested in Intelenet twice. The continued success of the company is a testament to the exceptional quality of the management team, the value delivered to its customers, and the deep engagement with Blackstone.
We are excited with the transfer of ownership to an industry leading company, Teleperformance, because it ensures continuity for Intelenet’s management, employees and customers," said Amit Dixit, Senior Managing Director and Head of Private Equity India at Blackstone.
Founded in 2000, Intelenet which is currently headed by Bhupender Singh as the CEO, employs over 55,000 people across eight countries including the US, UK, India and Philippines.
The company has seen many changes in ownership ever since it was found as an equal joint venture between Tata Consultancy Services and Housing Development Finance Corporation Ltd. (HDFC) in 2000.
After TCS divested its stake in 2004, Barclays Bank Plc. became the largest investor in the company.
The acquisition is expected to position Teleperformance a strong force in the domestic BPO space where it already has significance presence with the acquisition of Essar Group owned Aegis four years ago.
In 2014, the Paris headquartered company had acquired the US, Philippines and Costa Rica units of Aegis from the Essar Group for around $610 million.
“Intelenet’s amazing footprint in India is also an opportunity for Teleperformance to massively strengthen its presence in this key geography going forward,” said Daniel Julien, Chairman and CEO, Teleperformance, in a statement.
“Thanks to the Intelenet acquisition, Teleperformance is poised to move quickly ahead with its 2018-2022 strategic plan. Moreover, upon closing this deal will be immediately accretive for Teleperformance shareholders, as it should have a positive impact of around + 10 % on the Group’s earnings per share in 2018 on a pro forma basis.”
Blackstone which is the largest international investor in India with over $6 billion deployed between private equity and real estate.
Blackstone Private Equity has invested $3.5 billion in India over the last eleven years through two funds.
With this deal, Blackstone has crossed total exit of $3 billion in the country.
According to Teleperformance, the deal is expected to close by September 30, 2018 will have a positive impact of around 10 per cent on Teleperformance’s earnings per share before amortization of goodwill in 2018 on a pro forma basis.
The acquisition will be fully financed through debt provided by BNP Paribas, J P Morgan and Natixis, which may be replaced in whole or in part by a bond issue, it added.
Teleperformance which set up its India operations in 2001 presently employs around 13,000 people in the country, though bulk of its manpower are located out of Gurgaon.
Globally, the company which clocked a revenue of Euro 4.2 billion in CY2017 has around 223,000 employees working across 350 contact centers.