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Bangalore, Nov. 8

TATA Consultancy Services (TCS) has acquired the Santiago-based business process outsourcing firm Comicrom for $23 million in an all-cash deal.

As part of the deal, TCS also bought out the 49 per cent stake in the IT services joint venture from the Chilean firm, Comicrom, where it was a 51 per cent stakeholder.

The latest buy-out is the third such deal announced by TCS in the last three weeks with the other two being the acquisition of the insurance transaction processing unit of the UK-based Pearl Group Ltd and the Sydney-based Financial Network Services (FNS), a core banking solutions vendor.

Mr S. Ramadorai, Chief Executive Officer, TCS, announcing the acquisition in Bangalore, said this would significantly expand the company's footprint in the Latin American region. "This acquisition is a further step in realising TCS' strategy of acquiring leadership in platform-based BPO for the banking domain. It also expands TCS' capability in terms of becoming a full services player," he added.

Privately held and a profitable entity with zero debt, Comicrom had revenues of $35.5 million in 2004-05 and operating margins of 14 per cent. With some 1,257 employees, Comicrom is the market leader with 70 per cent share in the banking and pensions BPO business in Chile, and provides non-voice services such as cheque processing and other transaction related services to banks, insurance companies, pension funds, Government bodies and other large corporations in the Latam.

Tracking the acquisition news, TCS shares opened marginally higher on the BSE at Rs 1,470 on Tuesday and closed at Rs 1,477, after touching an intra-day high of Rs 1,484.

Mr N. Chandrasekaran, TCS' global head of sales and operations, said the company was eyeing revenues of $100 million from Latam operations in 2006-07, up from $30 million in the current fiscal. Part of the projected $100 million revenue would also include earnings from the multi-million ABN Amro deal, portion of which would be executed from TCS' Latam operations, he said.

TCS is expanding its operations in Latam, including Chile and Brazil, as it seeks more Spanish and Portuguese-speaking customers in those countries and in the US. TCS has a development centre in Brazil where it employs about 400 people and also has some 300 employees in Uruguay, and about 50 in Mexico and Chile.

The company plans to scale up its employee base in Latam from the present 700 to about 2,000 people in Brazil alone over the next two years.

(This article was published in the Business Line print edition dated November 9, 2005)
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