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Private equity firm Blackstone has acquired a majority stake in Serco’s BPO operations for £250 million (₹2,558 crore). This is the largest such deal for Blackstone in India. The sale does not include the UK business of Serco Global Services, which will be divested later.
The deal is expected to bring back some action in the Indian BPO market, which has not seen any major consolidation in the recent past. According to Nasscom, revenue from the Indian IT-BPM industry stood at $146 billion last year, growing 13 per cent last year and commanding a 55 per cent global sourcing share. The domestic market itself is rapidly growing with business coming from e-commerce companies and start-ups.
“This deal hints around consolidation, it hints at the fact that there is still some charm left in the Indian BPO industry. Hence, companies can look at more such action in the near future,” said Sandeep Ladda, partner and technology industry leader at PwC.
In 2011, Blackstone had sold the same BPO business — then known as Intelenet — to Serco for $634 million. The newly formed company will again be called Intelenet Global Services post acquisition.
“The good thing is that Serco has a solid focus and it is going after the few things and it wants to do them very well. It is also going after areas that weren’t traditionally its stronghold, which is a good sign,” said Sanchit Gogia, chief analyst at Greyhound Research.
Serco said the proceeds from the deal will be used to reduce its net debt. The sale is expected to close by December.
The business is expecting a revenue of about £235 million (₹2,405 crore) this year. Serco has 51,000 full-time employees across 67 centres in eight countries. The private sector BPO business provides a range of middle- and back-office services, and has a customer base of international organisations, predominantly across the financial services, insurance, telecom, travel and healthcare sectors.
The business will continue to be led by Susir Kumar and the existing management team.
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