Date:05/08/2008 URL: http://www.thehindu.com/2008/08/05/stories/2008080554991600.htm

Business

Essar’s BPO arm to acquire U.S. company

Special Correspondent

The cash transaction is valued at $250 million

Post-merger Aegis to become a leading global player
Services some of the world’s largest corporations

MUMBAI: Aegis BPO, a global business process outsourcing (BPO) provider and part of the Essar group, and PeopleSupport, Inc., a leading offshore BPO provider, have announced a definitive agreement to merge through Essar Services (Mauritius), Essar group’s wholly owned subsidiary, through a cash transaction with an aggregate equity value of abut $250 million. The deal has been approved by the boards of directors of both companies, said a statement issued by Essar.

As per the agreement, Aegis BPO will pay PeopleSupport stockholders $12.25 a share in cash through Essar Services (Mauritius), which represents a premium of about 29 per cent over PeopleSupport’s closing share price on August 1, the last trading day prior to the announcement, and a premium of about 42 per cent over the weighted average trading price of the company’s shares during the previous 30 trading days.

Following the merger, Aegis BPO will become a leading player in the global BPO market with operations in India, the Philippines, the U.S. and Costa Rica. With about 4,000 employees in the U.S. and more than 25,000 employees in several offshore locations, Aegis BPO can provide onshore, nearshore and offshore BPO services.

Lance Rosenzweig, PeopleSupport CEO and Chairman, said, “PeopleSupport has pioneered the development of offshore BPO in the Philippines and Costa Rica, and we are excited to become a part of a global outsourcing leader. We believe that this combination will deliver superior value to PeopleSupport’s stockholders and customers as well as provide our employees with an opportunity to be part of a larger enterprise and to explore career opportunities in new geographies.”

“This is a truly outstanding combination,” said Aparup Sengupta, Global CEO and Managing Director of Aegis BPO.

“The addition of PeopleSupport’s high performance operations in the Philippines and Costa Rica will enable Aegis BPO to become a leader in the global BPO market. Aegis BPO’s current annual revenues were over $320 million. It services some of the world’s largest corporations in the telecom, banking, insurance and healthcare verticals through its 25 delivery facilities in the U.S. and India. Aegis BPO operates over 14,000 seats and employs over 20,000 people globally. It has been recognised as being one of the largest offshore BPO companies in India and among the top two in the Indian domestic sector.

Credit Suisse is acting as financial advisor to PeopleSupport and Pillsbury Winthrop Shaw Pittman LLP is providing legal advice to PeopleSupport. UBS and Edelweiss Capital are acting as financial advisor to Aegis and Shearman Sterling is providing legal support to Aegis.

The transaction is subject to several conditions including PeopleSupport stockholder approval, regulatory approval and certain other customary closing conditions, and is expected to close in the third or fourth quarter of this year. The transaction is not subject to any financing conditions.