Ruias keen to buy Satyam's BPO business

Aegis BPO, the Essar group company keen on acquiring the BPO business of Satyam Computer Services, has highlighted “operational synergies” between the two businesses as a key rationale for the transaction in its formal bid approach submitted to the new Satyam board, a senior Essar executive told. While several senior Aegis BPO officials are scheduled to travel to the US this week, what is not known at this stage is whether members of Aegis BPO’s senior management will meet a few key clients of Satyam BPO in the US to emphasise its serious intent in trying to protect the interests of the company’s employees and clients, said an executive who asked not to be named. Aegis, controlled by the Ruias of Essar, could well be a frontrunner to acquire Satyam’s wholly-owned BPO after it formally sent an expression of interest (EoI) to the Satyam board that strongly emphasises the synergy between the two companies as they have customers in the same sectors. Aegis BPO, which has annualised revenues of around $500 million, has some 15-odd Fortune 500 companies among its global clientele. An Aegis BPO director, however, declined to reveal the names of its Fortune 500 clients, citing “confidentiality and non-disclosure issues.” Financial circles familiar with the matter expect a string of suitors to emerge for Satyam’s outsourcing arm in the weeks ahead. “Aegis BPO has sent an expression of interest to the Satyam board, indicating its interest to acquire Satyam BPO. Aegis will put in a more detailed follow-up economic offer after the Satyam board takes a call on the EoI,” the Essar executive said. Aegis BPO, however, declined to say if the company had put in a bid approach, only confirming that it remained on the lookout for acquisitions. "We never comment on any evolving transaction. But we are constantly scouting for opportunities that have a strategic fit with our outsourcing business. Aegis BPO has successfully integrated its 11-odd acquisitions of various sizes and magnitude encompassing scale, geographies, cultures and practices," Aegis BPO's CEO Aparup Sengupta told ET. None of the members of Satyam's new board, who were appointed by the government earlier this month to save the company from collapsing, could be reached for comment. The new board is yet to appoint banks or formally spell out the process for a sale of Satyam or parts of the company, although some suitors have indicated interest in acquiring parts or the whole of Satyam. The Essar executive said an Aegis-Satyam BPO alliance would be in the long-term of interest of Satyam BPO's 3,500-odd employees and its leading international clients. Aegis BPO employs around 32,000 employees globally. Both Aegis and Satyam BPO work with companies in the telecom, banking, finance and insurance sectors. Satyam BPO's biggest international clients reportedly include BellSouth, Verizon and GlaxoSmithKline. Aegis BPO 's mergers & acquisitions team is keen to do a detailed assessment of Satyam BPO's books to understand its revenue streams, especially its external revenues. "Any valuation exercise of Satyam BPO will try to ascertain the degree of Satyam BPO's business dependence on parent Satyam Computers for contracts. It will also try to assess what percentage of its annual BPO revenues are purely derived from its overseas clients. This assessment is critical in the run up to a possible economic offer to acquire Satyam BPO," said the Essar group official.