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Genpact laps up Citi’s BPO arm
India largest BPO company and the NYSE listed Genpact is said to have won the race to buy out Citi group call centres in India. The deal was clinched after a week of final negotiations for around $700 million, according to industry sources.
“No comment and nothing accurate in the rumours at all,” said Genpact president and CEO Pramod Bhasin who long with senior executives, is stationed in New York to stitch up the deal. The final leg of negotiations had just two suitors Genpact and Mumbai based Firstsource the only large third party BPOs who specialise in banking and insurance processes. Through both companies are said to have quoted around $700 million each for the buyout, Genpact is said to have won the deal on its ability to raise the required finances easily. With its win, Genpact will reaffirm its position as India’s largest BPO by abig margin. The Citi acquisition will add around 10,000 agents to its current strength of over 20,000 executives spread over eight cities in India. When Citi first put its BPO arm, Citi Global Service on sale in June, Investment bankers expected a valuation of over $1 billion for the entire bussiness. Later, after the subprime crisis, BPO stock have been trading weak in US and shares of firms like EXL and WNS have fallen considerably. It is however, not known if Citi has divested its stake in the BPO arm entirely or had retained a part of it.
Sabya Sachi Satpathy, senior director, Neo IT, an advisory firm, said the deal would set anew trend.”We will see captives increasingly exploring JVs and buy outs and third party outsourcing options to optimise the cost base and enhance flexibility.”