Aegis planning to acquire 3 firms, defers India listing

Having deferred its decision to register on the Indian bourses, the business process outsourcing arm of Essar Group, Aegis Limited is presently preparing to purchase a minimum of three IT services firms — one in India and two abroad. Earlier, in April this year, the Indian BPO firm had planned to acquire about INR 700 crore and intended to record a draft red herring prospectus (DRHP).

Quoting a banker who has been concerned with the procedure, a business website reports that the company has put off its plant to launch the initial public offering (IPO) since it has been able to spot three IT servicing firms it wants to acquire. He added that while two firms are of relatively large size and located overseas, the third in a small Indian company.

It may be noted here that Aegis, a company worth $700 million and is part of the

Essar Group which is a $15 billion conglomerate, has made as many as six acquisitions between 2007 and 2009 and a total of 13 firms during the last four years. The Indian BPO firm first acquired Global Vantedge for INR 100 crore in 2007 and followed the success by buying out Teletech Services for $13 million in the same year. In 2008, Aegis acquired AOL Call Center for a secret amount and PeopleSupport for $250 million. Last year, the company made two more acquisitions – CCN Group for $50 million and Ismart Timex in Sri Lanka for an unrevealed amount. Presently, the Indian BPO services vendor employs nearly 39,000 people who are based in different centers in more that 10 countries worldwide.

A company spokesman who preferred to remain anonymous told the business website that though Aegis has been all the time considering an assortment of dissimilar funding alternatives; it is yet to make a precise decision vis-à-vis future financing. Replying a question regarding the prospective acquisitions, the spokesman said that though the company has been constantly exploring prospects worldwide, he was not in a position to say anything explicit regarding the location, time frame and targeted companies.

Meanwhile, market experts are of the view that Aegis has taken a wise decision by delaying its IPO, as the firm’s proceeds rise following the prospective acquisitions and this, in turn, would have an effect on the firm’s appraisals and multiples. Besides, the company will be able to pay its debts owing to the new acquisitions with the money it plans to raise through the IPO. On the other hand, in case Aegis acquires any company while the DRPH is recorded, it would be required undertake a burdensome procedure evaluating the original document afresh. On the other hand, a source accustomed with the developments revealed that Aegis intended to raise funds with a view to utilize them for new acquisitions and expansion projects.