Spotlight

An archive of past spotlight issues.

 

The martinwolf team tracks noteworthy mergers and acquisitions, and offers
commentary on issues that impact our industry.

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"Diversity: the art of thinking independently together."

-Malcolm Forbes

Teleperformance Acquires Aegis USA Inc from Essar

Financial Information

  • Transaction Size: $610.0 M
  • Implied Enterprise Value (EV): $610.0 M
  • EV/LTM Revenue: 1.5x
Transaction Facts
  • Teleperformance S.A. (ENXTPA:RCF), a leading outsourced customer experience manager, announced Thursday that it had acquired Aegis USA Inc. from a portfolio company of Essar Global Fund Limited.
  • Aegis USA Inc., a major outsourcing company in the United States, the Philippines and Costa Rica, has revenue of $400 million and more than 19,000 full-time employees across the three countries. Essar will retain Aegis’s BPO operations in nine other countries, including India, Malaysia and Australia as well as countries in the Middle East, Europe and Latin America.
  • According to the press release, the deal is expected to be accretive to Teleperformance’s EPS by more than 10 percent starting from 2015, maintaining a consolidated EBITDA margin exceeding 10%.
  • Markets responded favorably to news of the transaction, with Teleperformance’s stock opening approximately 6 percent higher on July 10, the morning after the transaction was announced.
Consolidation and Diversification
  • A Pattern of Consolidation: The BPO industry as a whole is undergoing significant consolidation as slower growing, larger players turn to inorganic growth to boost revenue and expand geographic footprints. With this deal, Telepresence is doing both: building their U.S. market share by $400 million and strengthening their presence in lower cost areas (particularly the Philippines).
  •  Buyer’s Market: Debt costs are at a historically low level, fueling large acquisitions by players looking to boost or alter their business offerings. This past January saw Convergys’ $820 million acquisition of Stream Global Services, while SYNNEX announced in Sept. 2013 that they were acquiring IBM’s Customer Care BPO Services Business for $505 million.
  •  Diversifying Offerings: As major industry players consolidate, they are diversifying their portfolios to ensure that they are able to serve a maximum number of customers. This transaction builds Teleperformance’s capabilities in several verticals, particularly healthcare, financial services, travel and hospitality.

For more information, view the press release by clicking here.

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