Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Companies / Convergys in talks to buy Minacs for $500 million
BackBack

Convergys in talks to buy Minacs for $500 million

Minacs owners Capital Square Partners, CX Partners Llp had put the company on the block in January; Rothschild is advising them on the sale

Photo: MintPremium
Photo: Mint

Mumbai: Convergys Corp., the US-based call centre operator with operations in India, is in advanced talks to buy business process outsourcing (BPO) firm Minacs Ltd in a deal worth $500 million, two people close to the development said.

Capital Square Partners Pte Ltd and CX Partners Llp, the private equity (PE) firms which own Minacs, had put the company on the block in January. Investment bank Rothschild Inc. is advising the PE firms on the sale.

Convergys and a clutch of PE investors, including CVC Capital Partners Ltd and HIG Capital Partners had expressed interest in buying Minacs. The owners of Minacs have, however, signed an exclusivity agreement with Convergys, excluding the other suitors from the sale, one of the two people cited above said, requesting anonymity.

“Having a large global clientele, easy access to leverage or acquisition finance, ability to grow revenues through synergies with portfolio companies and ability to attract/retain top quality management make this an interesting sector for the investors, and we expect to see many more transactions in the coming 12 months," said Utpal Oza, managing director and head of investment banking at Nomura Financial Advisory and Securities (India) Pvt. Ltd.

Spokespersons for Minacs and CVC declined comment.

Convergys, HIG Capital, Capital Square Partners, Rothschild and Ajay Relan, co-founder of CX Partners, did not respond to queries emailed on Friday.

Minacs was acquired by the current owners from Aditya Birla Nuvo Ltd for $260 million in 2014.

In 2006, TransWorks Information Services Pvt. Ltd, a unit of Aditya Birla Nuvo, had acquired Canadian firm Minacs Worldwide Inc. for about $125 million.

The $3-billion Convergys provides customer management services in 58 languages from more than 150 locations across the world. It employs 130,000 people across 31 countries, according to the company’s website.

Convergys claims to be number one in the US customer management industry with more than half of the top 50 Fortune 500 companies as clients.

In India, Convergys is the 10th largest with operations in Mumbai, Thane, Pune, Hyderabad, Gurgaon and Bengaluru.

“Minacs could be a right acquisition target for Convergys as it will help to strengthen its position in India, a fast-growing outsourcing market," said the second person cited above, also declining to be named.

Minacs has 21,000 employees across 35 centres worldwide.

The business process management (BPM) space has attracted interest from global PE and strategic firms in the last couple of years. In April last year, French IT services company Capgemini SA acquired Nasdaq-listed iGate Corp. for $4 billion in cash as a way to strengthen its presence in the Indian and North American market. Global PE fund Apax Partners Llp, which held 28.91% in iGate, generated $1.2 billion from the transaction, more than three times its original investment.

On 5 April, Blackstone India, the Indian arm of global PE fund Blackstone Group Lp, acquired 60.5% stake in Bengaluru-based information technology services provider Mphasis Ltd for $1.1 billion. In September 2015, Blackstone Group repurchased the India-based BPO operations of the UK’s Serco Group Plc for £250 million, four years after selling the unit.

The BPO space in India has witnessed two PE deals worth $1.2 billion so far in 2016, compared with eight deals worth $442 million in 2015, a growth of 170%, according to the data from research platform VCCEdge.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 02 May 2016, 12:41 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App

Chat with MintGenie