Blackstone buys back Intelenet for Rs 2,500 crore
BANGALORE: The world’s largest PE firm Blackstone has acquired the Indian and most of the offshore business process outsourcing (BPO) operations of London-headquartered Serco Plc – formerly Intelenet — for Rs 2,558 crore, or $383 million.
This marks Blackstone’s biggest deal in India till date, and a rare instance of a PE fund buying back an asset. Blackstone had sold Intelenet to Serco four years ago. TOI first reported about a buyback deal brewing on February 18 this year. Blackstone clinched the deal for India’s third largest BPO weeks after a rival bid from CVC Capital Partners, which was the preferred bidder selected by Serco, ran into trouble due to resistance from the Intelenet management.
The PE major will acquire Serco’s BPO operations through a combination of $340 million in cash and $43 million as a loan note and the deal is expected to close by this year-end. The business will be re-branded as Intelenet Global Services. Susir Kumar, the current CEO of Serco Global Solutions, will continue to be the CEO of the new entity. The business has expected annual revenues of approximately 235 million pounds (Rs 2,405 crore) for this year. Amit Dixit, senior managing director and co-head of private equity in India at Blackstone, said, “We are embarking on the Intelenet 2.0 journey and delighted to once again partner with the company’s management team. With a market-leading position in the offshore banking and travel and hospitality verticals, Intelenet has the core platform to capitalize on future growth opportunities.”
The company has 51,000 full-time employees across 67 centres in eight countries. Serco is selling the international private offshore BPO operations, comprising of erstwhile Intelenet business that provided a range of middle and back office services, primarily to reduce debts.
Susir Kumar, who built Intelenet along with Blackstone, said the present management team and almost all of its clients continues to stay with the company. “This deal happened because of a change in Serco’s strategy,” Kumar added.
Blackstone’s bid to buy back always carried heft as Kumar and his team scaled up Intelenet revenues by winning work from Blackstone’s portfolio companies like Hilton Hotels and Travelport. These clients still account for 15-20% of the current revenue.
