Actis mulling 30% stake in Integreon for $60 million

What may be described as the first private equity deal in the BPO industry after almost three years, private equity company Actis is understood to be considering the purchase around 25% to 30% of Integreon, a company engaged in providing legal and knowledge process outsourcing services.

It may be mentioned here that 2009 has witnessed a considerably drop in investments by private equity firms in all sectors. A report published by Venture Intelligence (VI), a study group concerned with private equity and M&A dealings, private equity firms had invested around $3,824 million in more than 232 transactions during 2009 in comparison to $10,468 million invested by them in as many as 443 transactions during 2008.

According to highly placed sources, dialogue between Actis and Integreon has progressed and if things materialize the way they appear to be heading, the deal may be finalized any time during the ensuing week. The source, who claimed to be in the know of the discussions, further revealed that Actis is likely to make an investment between $50 million and $60 million to acquire its stake in the LPO and KPO firm. In fact, the LPO and KPO firm has also had discussion with another prominent private equity firm, but now the talks are confined between Actis and Integreon, he elaborated.

Presently, Integreon, held by Philippine multinational Ayala, has a workforce of 2,000 people among which 1,200 are in India. The private company earns around $60 million in revenue. In November 2009, Integreon had purchased Grail Research, the exclusive research division of Monitor Group, an advisory firm offering consultancy services to business houses for unidentified amounts. This far, Integreon has acquires six firms.

According to Lokendra Tomar, the chief operating officer of Integeron, during 2010, his firm has plans to rasie capital and, hence, they have been looking at opportunities to align with any niche private equity firm. He, however, asserted that although talks were on with Actis, the deal is yet to be finalized.

Meanwhile, a representative of the private equity firm Actis said that his company never makes remarks on potential transactions. The firm is eager to invest in the emerging markets and during the later phase of 2008, had earmarked a nearly $2.9-billion fund for investments in Latin America, Asia and Africa. In 2006, the firm had invested in Paras Pharma, an Indian FMCG company engaged in the manufacture and marketing of healthcare products.