In the rapidly changing scenario within the Indian BPO industry, the market is abuzz with merger and acquisition talks. Mahindra Satyam acquired Vcustomer, then got merged with Tech Mahindra . Now the speculations are high that Infosys might buy a major stake in Firstsource .

DNA Indiareports– “Firstsource has a huge debt burden, made worse by foreign currency convertible bonds (FCCBs) — bonds with a fixed maturity issued by Indian companies to foreign investors — due to mature later this year. Around 60% of the FCCBs maturing were raised at a rupee-dollar rate less than 42 and since rupee has significantly depreciated in 2011, the firm is expected to bear heavy losses.”

First source has been trying to sell itself for last 1 year however was unable to get a suitable buy till Infosys begun to show some interest.

Experts suggest “Firstsource derives 34% of its revenue from healthcare. If Infosys goes for the acquisition, it will add more teeth to this vertical, which is expected to give contract wins in the coming quarters, thanks to the US healthcare reforms.

In another major development as reported by Times News Network, Back office majors Sutherland Global Services and Genpact are in the final race to acquire Apollo Health Street, the healthcare business process outsourcing (BPO) arm of Apollo Hospitals, in a deal valued at over Rs 1,100 crore ($220 million).

Sutherland, which has put in a higher bid, is the front-runner in the race.

Apollo Health Street takes up the outsourced financial and technology work for the big healthcare service providers, helping them to run profitable and efficient operations.

The acquisition will help Sutherland to scale up in the healthcare BPO segement.

Source: BPO Voice

GlobalConnect changes name to AGC Networks. GlobalConnect was bought last August by Aegis Australia and over the past 12 months it has been integrated into the company.

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The Philippines is the most cost-effective outsourcing destination in Asia, according to real estate advisory firm CB Richard Ellis. In a recent study by CBRE comparing 15 central business districts in Asia, the Philippines was ranked the second cheapest with lease rates at $19.1 price per square foot/annum, next to Jakarta’s $16.3. This despite an increase in office lease rates in Metro Manila and a decline in vacancy rates this year. The Philippines also ranked second in terms of office rental yields in Asia, at 10% in the third quarter of 2011, following India’s 11%.

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Unisys Corporation announced that its Australian and New Zealand subsidiaries have signed agreements with McDonald’s to provide end-user IT support services to McDonald’s restaurants across Australia, New Zealand and the South Pacific. The five-year contracts have an estimated combined value of approximately AU$30 million (US$30.5 million) and represent new business for Unisys.Under the terms of the contracts, Unisys will provide service desk, on-site and remote support services to McDonald’s chain of more than 1,000 company-owned and franchised restaurants across Australia, New Zealand and the South Pacific region, including New Caledonia, Fiji, Tahiti, American Samoa and Samoa.

T2 snags top influencer

Mary Sue Rogers routinely appears on lists of the Top Consultants in the World. Ms. Rogers has worked in HR for over 25 years, in a variety of roles focused on transforming the role of HR in organisations through consulting and outsourcing. She has experience with a variety of industries including financial services, industrial and consumer packaged goods. T2 announced the appointment of Mary Sue Rogers as the new Global Managing Director of HR Managed Services. Mary Sue’s remit will be to lead Talent2’s Payroll, HR Advisory and Learning businesses

International Business Leaders Meet for Outsourcing Summit in China

Last week, a large number of international political and business leaders converged on Ma’anshan, China, for the fourth annual Global Outsourcing Summit. The conference focused on how outsourcing, including call center development, can help develop industries throughout the world, with a particular focus on China. Brazil, the Philippines and the United Arab Emirates have also all been developing vibrant BPO markets that are helping to create jobs and economic growth. Worldwide the business process outsourcing market expanded by 25 percent during the first quarter of this year, according to a report from the Everest Group.

Oracle to buy RightNow Technologies

IT giant Oracle will buy cloud-based CRM specialist RightNow Technologies to boost its customer service offering. RightNow customers in the region include Telecom NZ and Virgin Mobile, while the US-based company has around 1000 employees worldwide, including a branch in Australia. “Oracle is moving aggressively to offer customers a full range of cloud solutions including sales force automation, human resources, talent management, social networking, databases and Java as part of the Oracle Public Cloud,” said Oracle’s Thomas Kurian. “RightNow’s leading customer service cloud is a very important addition.”

By Bibhu Ranjan Mishra

UK-based Serco Group, which earlier bought Mumbai-based back office services provider Intelenet Global Services, has further expanded its global BPO capabilities by acquiring Excelior, the contact centre business of Australian firm Skilled Group.

According to an announcement made by Skilled Group to Australian Stock Exchange, the company has entered into an unconditional agreement to sell Excelior to Serco for a total consideration of A$13.2 million. This includes an earn-out payment of up to A$5 million payable over the next two years upon achieving certain revenue targets. The agreement was signed with Serco Pty, the Australian subsidiary of Serco.

Skilled Group also said the sale of Excelior was in line with the company’s strategy to focus on its core business after divesting the non-core assets. Skilled Group, which provides labour hires and workforce services in Australia and New Zealand, has over 160 offices with revenues of around A$1.9 billion.

According to industry sources, the process to acquire Excelior was initiated by Intelenet Global Services much before Serco acquired it. However, in the new scheme of things, Intelenet Global is expected to drive the post the merger integration of Excelior with Serco.

Serco, a global services company, had acquired Intelenet in June this year for £385 million (about Rs. 2,770 crore). Before acquiring Intelenet, Serco had about 8,000 people located in India as a part of its BPO practice.

With the addition of about 32,000 people from Intelenet, Serco BPO has now a headcount of about 40,000.

Excelior was established in 1999. The company employs about 2,000 people in Australia across four centres including Box Hill in Melbourne, Bendigo in Victoria, Burnie in Tasmania and Robina in Queensland.

Source: Indian Business Standard

US BPO services APAC Customer Services today said it would sell itself to JPMorgan Chase’s private investment arm One Equity Partners for about $470 million in cash.

Under the terms of the agreement, which has been approved by the board of APAC, One Equity Partners will pay APAC stockholders $8.55 per share in cash, representing a premium of 57 per cent over APAC’s closing share price on 6 July 2011.

One Equity Partners expects the acquisition to be funded through committed equity and credit facilities and is not subject to any financing contingencies.

Theodore Schwartz, chairman of APAC and his affiliated entities, representing approximately 39 per cent of the company’s outstanding shares, have entered into a voting agreement to vote in favour of the transaction.

Founded in 1973 by entrepreneur college student Schwartz, Illinois-based APAC is a BPO provider to companies in healthcare, business services, communications, media and publishing, travel and entertainment, financial services and technology industries.

One Equity is the majority owner of NCO Group, a leading global provider of business process outsourcing services. One Equity said that it will seek to combine APAC with NCO Group to build market leadership in business process outsourcing and customer care solutions.

Source: Domain-B

ANZ Regional document processing specialist Speedscan has announced new outbound capabilities with the acquisition of the e-Billing business of Connxion Limited.

Connxion’s e-Billing business will be added to Speedscan’s document processing services for inbound communications that include mailroom services, scanning, OCR, data entry, workflow and document hosting.
Speedscan claims the Connxion e-Billing integration will result in it becoming the largest independent and privately owned Business Process Outsource provider, focused on document intensive processes, across Australia and New Zealand.

Speedscan first began in 1997, and today incorporates businesses in Sydney, Melbourne, Manila, Auckland, Wellington and Christchurch.

Speedscan has now acquired the intellectual property, systems and infrastructure that support all of Connxion’s e-Billing clients across the Asia Pacific. The company will continue to work with the clients of Connxion’s e-Billing business and has engaged all key staff who developed and supported the technology. The acquisition has grown the Speedscan team to 140 employees.

Mark Josman, Chief Executive Officer of Speedscan, said, “With the growth in outsourcing, Speedscan is well positioned to become the preferred supplier of outsourced services for both inbound and outbound document intensive processes. With Connxion’s outbound communications platform, e-Billing and payments services we now have an extensive capability for corporate and government sectors.

“We are delighted that we can now extend the benefits further to our clients across Australia and New Zealand. This unique capability will set Speedscan apart from other competitive players in the market and enable us to continually grow.”

Speedscan is backed by leading Private Equity investors.

Source: IDM

By Team VCC

The deal will also include the purchase of Cambridge’s technology infrastructure for continued service delivery.

Business process outsourcing firm Cambridge Solutions Ltd has sold its loss-making wholly owned arm Cambridge Integrated Services Group, Inc. (CISGI), which houses the US workers’ compensation and third party administration operations, to US-based Sedgwick Claims Management Services for $22.7 million (around Rs 101.9 crore).
British outsourcing firm Xchanging Plc. owns around 75 per cent stake in Cambridge Solutions.

Due to unsatisfactory returns and significant future commitments of the CISGI business, Cambridge Solutions’ board of directors approved the sale of CISGI operations (US workers’ compensation and third party administration) to Sedgwick.
“Selling the CISGI operations to market leader Sedgwick will provide our customers and employees with a good home for the future,” said Ken Lever, executive director, vice-chairman and acting CEO of Cambridge Solutions.

The deal involves payment of $22.7 million in cash, of which $3 million will be held in escrow for up to 18 months, the company said.

A property & casualty claims and risk management services provider, CISGI serves self-insured employers, insurance carriers and public entities in the USA, Europe and Australia. The sale will cover workers’ compensation, managed care, consumer claims, professional liability claims and structured settlements operations of CISGI, as well as most of its contracts.

The transaction will also include the purchase of Cambridge’s technology infrastructure which will enable continued service delivery to Cambridge clients. Besides, CISGI and Sedgwick will enter into a transition services agreement to facilitate a smooth handover of operations. The transaction will be reflected as a discontinued operation in the Q2 2011.

Sedgwick is the North American provider of innovative claims and productivity management solutions. The company and its affiliates deliver cost-effective claims administration, medical management, risk consulting and related services. The current acquisition will enable the company to add an array of services in the areas of transportation liability, consumer financial services, structured settlements and Medicare compliance.

Cambridge Solutions, with approximately 4,600 employees on board, is an international BPO and IT services provider, and is listed on various the Indian stock exchanges. The company has reported a total income of $49.53 million in FY10, with a net loss $.32 million. Almost two-thirds of Cambridge’s revenue comes from high-end BPO operations spread across the USA, India and Europe. Additionally, it has a strong presence in the lucrative insurance processing domain.

A similar deal took place only a few weeks ago when ICICI Group-backed IT & ITES firm 3i Infotech sold its US-based Global Billing & Payments unit, comprising of Regulus Group and J&B Software, to an affiliate of private equity firm Cerberus Capital Management, L.P. for $137 million.

Source: VCCircle

By Paolo Montecillo

Genpact Ltd., a firm listed on the New York Stock Exchange, has completed its $550-million acquisition of Boston-based Headstrong Corp. in a bid to expand its footprint in the world’s booming outsourcing sector.

The merger between the two firms, both of which employ thousands of employees in the Philippines, is expected to result in operational efficiencies and cost savings.

“We are thrilled to welcome the highly talented employees from Headstrong to the Genpact team. The critical domain and technology expertise we have gained today … creates a uniquely powerful value proposition for our clients from whom we’ve already received terrific feedback,” said Pramod Bhasin, president and CEO of Genpact.

“Joint teams are focused on several potential cross-selling opportunities and we have dedicated senior leaders from Genpact and Headstrong working on the integration,” Bhasin added. “We are confident of delivering enhanced value to our clients, shareholders and employees.”

Genpact is currently one of the biggest business process outsourcing (BPO) companies based in India.

The company, which posted $1.26 billion in revenue last year, manages over 3,000 processes for more than 400 clients worldwide. The company has over 43,000 employees around the world.
Headstrong maintains operations in seven countries, including offshore centers in India and Manila, with more than 3,700 employees globally.

Source: Inquirer