AEGIS ACQUIRES AUSTRALIAN BPO CO FOR $40.7M

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AEGIS, Essar Group BPO has acquired Australia-based UCMS Group for $40.7 million (Rs 200 crore). Aegis's Australian affiliate, Aegis BPO Services Australia, will pay UCMS shareholders $0.68 per share.
With this acquisition, Aegis will add 2,000 UCMS employees, taking the staff strength of the combined entity to 35,000 spread across India, the Philippines, United States, Costa Rica, Kenya and Australia. Aegis, which has annualised revenues of approximately $500 million, is looking to complete the deal by August 2009. Currently, the BPO's revenues from Australia are about $5 million. UCMS group's revenue in the last financial year was around $157 million. Aegis will fund this deal through internal accruals.

This will be Aegis' 12th acquisition over the last three years. Last August, the company acquired PeopleSupport for $250 million, which gave it a larger presence in the Philippines. Earlier this year, Aegis offered to buy US-based BPO ICT Group for $128 million, but it's offer was rejected.

The decision to buy UCMS will help Aegis expand its presence in the Australian markets. "Almost 80% of UCMS' revenues come from Australia from verticals like BFSI, telecom, and healthcare. This will help us expand our local footprint," said Aparup Sengupta, Global CEO and managing director of Aegis. UCMS also provides customer lifecycle management (CLM) services to clients in the travel and transport, utilities and retail verticals.

Denice Pitt, CEO UCMS, said that this combination would provide their employees with an opportunity to be a part of a larger enterprise and explore career opportunities in new geographies. "Together, UCMS and Aegis will create operational and client acquisition synergies," he said. The deal is subject to approval by UCMS shareholders and the Supreme Court of Victoria state in Australia.

Aegis has nine centres in the US. These centres are not for near-shore operations, but are outsourcing centres that cater to US clients. The majority of Aegis' revenue comes from the US though the company wants to expand in emerging markets like Africa. "We are interested in African and parts of Europe like UK and Ireland. We plan to expand our footprint in these areas through acquisitions which will be funded through our internal accruals," said Mr. Sengupta. Currently, Aegis has a 250 seat facility in Kenya, which provides CLM services for its telecom clients.

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