In the largest acquisition by an Indian business process outsourcing company till date, Pune-based HOV Services has acquired US-based BPO Lason for $148 million (about Rs 660 crore).
The leveraged buyout -- effective Wednesday -- is valued 3.5 times the acquirer's current turnover if its March 31, 2006, figures of Rs 164 crore (Rs 1.64 billion) are taken into account.
So far, the largest acquisition by an Indian BPO was that of Canada-based BPO Minacs Worldwide by Aditya Birla group-owned TransWorks for $125 milllion (about Rs 560 crore) in June 2006.
Among other big deals, Infosys acquired Citibank's 23 per cent stake in Progeon last April for $115.13 million (about Rs 515 crore), while Wipro acquired Spectramind for around Rs 420 crore (Rs 4.20 billion) in 2002.
The largest acquisition in the nearly $8 billion Indian BPO space is that of Daksh by IBM in 2004 for $170 million (around Rs 760 crore).
HOV will acquire Lason through HOV Services LLC, its wholly owned subsidiary in the US. The company has raised $188 million (around Rs 837 crore) through a combination of equity and debt instruments.
The company will thus have cash worth $40 million (around Rs 180 crore) post-acquisition to finance its future activities.
It has mobilised $63 million (around Rs 280 crore) from Merrill Lynch and Apollo Management, two large private equity funds, and group entity HOV Capital through equity subscription, while it raised $125 million of debt.
Speaking to Business Standard, HOV Services executive director Sunil Rajadhyaksha said the acquisition would make the company one of the two largest listed BPO companies in the country.
Jointly, the companies will serve over 50 per cent of the Fortune 100 companies, and have over 4,000 active customers in North America.
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