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Mumbai: Pramod Bhasin led Genpact plans to acquire Intelenet Global Services. The company is in talks with Blackstone, which holds a little under 80 percent in Intelenet, to explore a potential acquisition, reports Economic Times.
The acquisition may benefit Genpact, as the company is still dependent significantly dependent on its one-time parent, General Electric (GE). GE contributes around 40 percent of Genpact's revenues. "Intelenet's India business is the chief attraction to Genpact, but Blackstone is not willing to sell that alone," said a person related to the acquisition. The transaction value of the acquisition is likely to be around $600-750 million.
Replying to the mail sent by economic Times, Intelenet's Executive Vice President, Sandeep Aggarwal said, "The information was incorrect and the company was not aware of it." Whereas a senior Blackstone said, "I cannot comment on speculation."
It has not been easy market for Genpact in India, as the company failed to scale up its domestic business. On the other hand, Intelenet has an established domestic BPO business under Sparsh BPO, an acquisition it made in 2006. Alok Shende, Principal Analyst, Ascentius Consulting said, "Slowdown in the western markets has compelled internationally-focussed BPO firms to seriously evaluate risk diversification strategies. Focus will turn to markets that hold innate potential for size as well as growth."
GE which holds 18 percent in the company also plans to exit its holdings. Genpact's GE business has been under strain and its substantial contribution to revenue has been a cause of concern. In 2008, GE extended its master services agreement (MSA) with Genpact, ensuring a committed volume of business to Genpact, but concurrently advanced the expiration date of the provision requiring it to hold a minimum number of shares in the back-office firm from December 2009 to March 2009.
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