India-focused private equity fund CX Partners Llp and Capital Square Partners Pte. Ltd have exited their investment in business process outsourcing (BPO) firm Minacs Ltd by selling it to US-based Synnex Corp. for $420 million, Synnex said on Monday.

Synnex, a Fortune 500 corporation, will integrate Minacs into its wholly owned subsidiary Concentrix.

Synnex is a leading business process services company optimizing supply chains and providing outsourced services focused on customer relationship management.

Founded in 1980, Synnex operates in 26 countries around the world. Concentrix, with operations across 25 countries, has more than 70,000 employees servicing more than 400 clients.

The company has a large delivery footprint in India, the Philippines, Europe, the Asia-Pacific, North America and South America, it said in a statement.

Since Minacs’s revenue is estimated at $500 million, the combined entity will earn more than $2 billion in revenue in 2016, according to US-based HfS Research, an outsourcing-research firm.

“As with all the recent M&A (merger and acquisition) activity in this space, this acquisition is more about added scale than skill but we would love to see one of the major contact centre players acquire one of the design consultancies or creative agencies to really get in the forefront of the market to address digital customer experience," said Melissa O’Brien, research director, BPO, HfS Research.

The traditional model of both IT outsourcing industry and back office support is getting impacted as intelligent automation tools are making companies move away from a labour arbitrage model.

For this reason, over the past few years, many IT firms have either developed automation tools to start replacing the work done by humans at BPO divisions or sold their stand-alone BPO divisions.

In April last year, French IT services company Capgemini SA acquired Nasdaq-listed iGate Corp. for $4 billion in cash to strengthen its presence in India and North America. Global private equity fund Apax Partners Llp, which held a 28.91% stake in iGate, generated $1.2 billion from the transaction, more than three times its original investment.

In July last year, Hinduja Global Solutions bought a significant part of Bengaluru-based IT service provider Mphasis Ltd’s domestic BPO business for 17 crore in a slump sale. The Indian arm of global private equity firm Blackstone Group Lp in April this year acquired a 60.5% stake in Mphasis 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 private equity deals worth $1.2 billion in 2016, compared with eight deals worth $442 million in 2015, an increase of 170%, according to data from research platform VCCEdge.

Minacs chief executive officer Anil Bhalla will stay with the combined company and join Concentrix’s senior executive staff. “I am confident that the combination of our capabilities will present an even more compelling value proposition to the marketplace," Bhalla said. “Across industries, clients can expect our shared vision and strategic scale to help them solve bigger, more complex business challenges."

Officials at CX Partners and Capital Square Partners could not be reached for comment.

The private equity firms had put the firm on the block in January. Investment bank Rothschild Inc. was advising them on the sale. Several US-based BPO firms and a clutch of private equity investors, including CVC Capital Partners Ltd and HIG Capital Partners, had expressed interest in buying Minacs, Mint had reported in May.

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 $125 million.