INDIA BUSINESS WORLD - DECEMBER 1st - DECEMBER 15th
- 2007
HERO GROUP BUYS UK'S DALGLEN FOR RS 320 CR
HERO Group has acquired British BPO and call centre company Dalglen for £40 million (Rs 320 crore). Dalglen has a large presence in Scotland. It is one of the largest call centres in Europe and in the UK. Hero group is planning to grow its BPO services into an international operation through this acquisition, say sources. Hero group - which has a strong presence in the automotive space in India thanks to Hero Honda - will be looking to utilise synergies at 'both ends' through this acquisition, sources add.
The acquisition will make HeroITES, the BPO and IT-enabled arm of the Hero group, among the top 15 BPO companies in India and among the top 10 in the UK. HeroITES currently services several Fortune 500 clients and offers contact centre, tech support, transaction processing and other services. It has a 650-seat delivery centre in Gurgaon with sales offices in UK and the US. Post acquisition, the combined group will have clients spread across sectors like telecom, financial services, IT, retail, utilities and consumer durables. The deal covers several wholly-owned subsidiaries of Dalglen including Telecom Service Centres (TSC), TSC Credit Management, Sigdev and 9 dormant subsidiaries of TSC. Dalglen group had annual revenues of £55 million in 2007 and is growing at a 15% clip annually. It has nine sites across the UK and an employee base of 3,000. It's client roster includes names like Vodafone, T-Mobile, Hewlett Packard, HBOS and HSBC.
The acquisition has been carried out offshore through Hero UK. Hero UK is a wholly-owned subsidiary of Hero BV, an offshore wholly-owned subsidiary of HeroITES in Netherlands.Of the total transactional value of £40 million, £30.50 million was payable upfront. The balance was dependent on the Dalglen group receiving development grants from the Scottish executive. The acquisition was funded by a foreign currency loan of £45 million raised by Hero UK from ICICI Bank UK.
The acquisition has worked in a share swap agreement with the top management of Dalglen (including CEO Ken Hills, COO David Ewing and CFO Dean Hartley). As part of the deal, these officials invested £14,46,431 in Hero UK to subscribe to fresh equity shares totalling 12.41%. This shareholding will swapped for ordinary shares in HeroITES at an exchange ratio of 10.9476 shares of HeroITES for every one share held in Hero UK. Each ordinary share of HeroITES has been valued at Rs 14.27. Post swap, the Dalglen top officials will own 12.41% of HeroITES.
|
