The Hindu Business Line : HOV Services to buy US BPO unit for Rs 600 cr

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Mumbai Feb. 26 The Pune-based business processing outsourcing company HOV Services (HOVS) has agreed to acquire a US-based BPO for $148 million (over Rs 600 crore).

LASON, the acquiree company, will become a wholly owned subsidiary of HOVS, said a statement from the latter. The transaction is effective immediately, the statement added.

The two companies will have trailing annual revenues in excess of $ 200million and a global workforce of more than 11,000 employees, it said. Together, they will also serve more than 4,000 active customers in the North American marketplace.

LASON acquisition is consistent with HOVS' strategy of acquiring leading global BPO companies to deliver superior value to current and prospective clients through its globally positioned resources, said Mr Sunil Rajadhyaksha, Executive Director, HOV Services.

The merger will enhance marketing, servicing and delivery footprints to clients worldwide through integration, realignment and cross-selling, said Mr Rajadhyaksh.

The company's clients will benefit from having delivery capability from over 49 locations located in the US, Canada, India, China, and Mexico delivering end-to-end integrated solutions, including document-centric applications, workflow management, finance and accounting, electronic publishing and knowledge processing services.

Mr Ronald D. Risher, President and CEO, LASON, said, "Together we will be able to deliver a more comprehensive and complete suite of outsourced solutions in our key markets that include finance administration, financial services, healthcare and publishing. In particular, the HOVS outsourced solutions in Accounts Receivables management will be of immediate interest to our established client base."

According to Mr Rajadhyaksha, the current LASON leadership and management team will remain and play a key role in the growth of HOVS.

"We are confident that our established competence in the industries we serve will be enhanced by LASON's management and delivery mechanisms. This merger allows us to leverage their combined expertise and ours to expand opportunity for our clients and investors," said Mr Rajadhyaksha.

Under the merger agreement, HOVS' wholly owned subsidiary in the US will acquire 100 per cent of the outstanding equity securities of LASON in a transaction valued at $148 million.

The company raised $188 million of new capital from leading global institutions — $63 million in equity and a debt facility of $125 million.

Upon closing, the company will have over $85 million in equity.

More Stories on : Outsourcing | Mergers & Acquisitions | Overseas Investments

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