MUMBAI: Ruias-led Essar Group has decided to sell its business process outsourcing (BPO) firm Aegis to Singapore-based Capital Square Partners for about $300 million in a bid to reduce the group debts.
AGC Holdings Limited (AGC) Mauritius, a wholly-owned portfolio company of Essar Global Limited (Essar Global), has entered into a definitive agreement with Capital Square Partners (CSP) to sell 100% of its stake for an undisclosed amount in ESM Holdings Limited, Mauritius, which is the holding company of Aegis, a major global outsourcing company, according to a company statement on Monday.
“The deal size is pegged about $300 million and the net proceeds of this sale will be used to retire Essar’s debt,” said a source in the know of the development.
Essar entered the BPO business in 2004 with the acquisition of the US-based Aegis Communications Group, with 2,000 employees.
In 2014, AGC announced the successful sale of Aegis USA Inc (comprising Aegis’ operations in the US, the Philippines and Costa Rica) to Teleperformance, thereby substantially reducing Aegis revenues and headcount.
Commenting on the deal, Uday Gujadhur, 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.”
Currently, Aegis has revenues of about US$400 million, and employs more than 40,000 people across 47 centres in 10 countries with operations in India, the UAE, Sri Lanka, Malaysia, Australia, South Africa, Peru, Argentina, Saudi Arabia and the UK.
Sanjay Chakrabarty and Mukesh Sharda, managing partners of CSP in a joint statement 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 our sector knowledge and expertise. The Essar Group has built this company and achieved significant scale and value creation, and we look forward to continue to build on the core values of customer focus, agility and service excellence of Aegis.”
The transaction is expected to close during the first quarter of FY 2017-18, subject to receiving regulatory approvals and other customary closing conditions, said a statement.
Sandip Sen, managing director, Aegis, said “the added capabilities of our new shareholder will present an even more compelling value proposition to the marketplace.”
Essar’s advisors in the transaction include Axis Capital as financial advisor, and Platinum Partners and Sidley Austin as legal advisors while Shearman & Sterling and Shardul Amarchand Mangaldas were the legal advisors to CSP.
