The Hindu Business Line : Hindustan Lever to sell 51 pc stake in BPO arm to Capgemini

Business outlook
Transaction is expected to be completed in October.
Will add Chennai to Capgemini's footprint and contribute to its objective of reaching 10,000 employees in India by the end of 2007.

Mumbai , Sept. 7

Hindustan Lever Ltd (HLL) said it has entered into an agreement with the Europe-based Capgemini group to sell 51 per cent stake in Unilever India Shared Services Ltd (`Indigo').

Indigo is currently a fully-owned subsidiary of HLL providing BPO, financial shared services, and Sarbanes Oxley compliance services to the Unilever group throughout the world. Capgemini is a computer services company.

The terms of the agreement were not disclosed but the transaction is expected to be completed in October, said statements from HLL and Capgemini.

Capgemini BPO expertise will help Indigo leverage its domain knowledge of the FMCG sector to offer services to customers outside the Unilever group, said the statement.

"The partnership with Capgemini brings global shared services skills and technology to HLL and Unilever," said Mr D. Sundaram, Finance Director of Hindustan Lever Ltd and Chairman of Indigo.

"This acquisition reaffirms Capgemini's commitment to increasing its presence worldwide, in particular in India, and strengthening its position in BPO finance and accounting services," said Mr Hubert Giraud, Chief Executive Officer, Global BPO Capgemini.

Indigo has 600 professionals, including 75 chartered accountants, working out of Bangalore and Chennai.

Capgemini has 6,000 professionals in India.

The Indigo acquisition will add Chennai to its footprint and contribute to its objective of reaching 10,000 employees in India by the end of 2007, said Mr Baru Rao, CEO, Capgemini India.

Although HLL and Capgemini would not disclose the financial details of the transaction, some idea of BPO valuations may be had from EDS's recent acquisition of 52 per cent stake in BPO company MphasiS BFL for $380 million (over Rs 1,700 crore).

MphasiS' valuation worked out to Rs 3,300 crore, the company at the time of acquisition had 12,000 employees and had reported revenues of Rs 940 crore and profits of 149.8 crore in fiscal 2006.

Indigo has 600 employees and had reported profits of Rs 1.4 crore in the year ended December 2005. However, MphasiS is present across a range of BPO verticals while Indigo specialises in the FMCG vertical.

On Thursday, HLL shares ended lower on the bourse, falling by 85 paise to Rs 238.15 on BSE.

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