BackAditya Birla Nuvo to sell BPO unit Minacs
Aditya Birla Minacs to be divested at an enterprise value of $260 mn; transaction marks Aditya Birla group's exit from the IT business
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Mumbai: Aditya Birla Nuvo Ltd (ABNL) on Thursday agreed to sell its Canada-based business and technology outsourcing firm Aditya Birla Minacs Worldwide Ltd, the firm said in a regulatory filing. The transaction marks Aditya Birla group’s exit from the information technology business.
Pursuant to a share purchase agreement with a group of financial investors led by Capital Square Partners (CSP) and CX Partners (CXP), ABNL IT and ITeS Ltd, a wholly owned subsidiary of ABNL, will divest Aditya Birla Minacs at an enterprise value of $260 million (around ₹ 1,600 crore,) subject to working capital adjustments.
Macquarie Capital is the exclusive financial advisor and Shearman and Sterling is the legal advisor to the private equity consortium on the transaction.
The transaction is expected to be completed in two to three months, subject to the requisite customary and regulatory approvals.
Dr Rakesh Jain, managing director, Aditya Birla Nuvo, said, “Considering ABNL’s capital commitment and growth plans for other businesses, the company has decided to divest Minacs. We are confident the new shareholders will provide the requisite direction to Minacs and enable it to rise to its full potential."
The sale comes when business houses are exiting from traditional business process outsourcing (BPO) models. Last year, International Business Machines Corp. sold its customer service BPO business to Synnex Corp. for $505 million, citing low margins and profitability.
Minacs employs 21,000 people across three continents and 35 centres. It is the sixth largest BPO firm in the country, according to industry lobby Nasscom rankings.
“Minacs was a non-core asset for ABNL and the sale is in line with the strategy of focusing more on retail, financial services and telecom," said Santosh Singh, banking, financial services and insurance analyst at Espirito Santo Securities India Pvt. Ltd, a brokerage.
The sale was always on the cards and was part of the parent’s core strategy, he said.
The Aditya Birla Group is a $40 billion conglomerate with interests in retail, chemical, metals and financial services. Over 50% of the Aditya Birla Group’s revenues flow from its overseas operations.
The revenue of Minacs rose 23% to ₹ 774 crore in the September quarter against a year ago. Net profit grew 3% to ₹ 32 crore. It has not yet posted earnings for the three months ended December.
On Thursday, shares of ABNL shed 0.19% to ₹ 1,065.10, while the benchmark Sensex lost 0.72% to 20,498.25 points.
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