HDFC, Barclays to exit BPO firm Intelenet

The Housing Development Finance Corporation (HDFC) and Barclays Bank today agreed to sell their entire shareholding in business process outsourcing (BPO) services provider Intelenet Global Services to SKR BPO Services.

While there's no confirmation on the deal amount, sources say it's pegged around $200 million (Rs 820 crore) which will make it the largest BPO deal in the country.

SKR BPO Services is jointly owned by the management of Intelenet and Blackstone GVP Capital Partners. Intelnet has over 60 Indian and international clients and employs more than 17,000 people in 18 offices in India and overseas. It is a 50:50 joint venture between Barclays and the company, established in 2004, has gross assets of $107 million (around Rs 410 crore).

Following the conclusion of the transaction, Intelenet will continue to provide services to Barclays in relation to certain processes currently offshored to India. It has also agreed to assist Barclays in establishing a wholly-owned BPO operation in India which will serve Barclays incremental offshoring requirements. Intelenet, sources say, may reduce its exposure to Barclays since around 70% of Intelenet's revenues (around Rs 410 crore) currently comes from Barclays.

Meanwhile, Sparsh BPO Services too has been informed by the board of directors of SKR BPO Services that it has resolved to execute the Share Purchase Agreement to purchase 68.39 million equity shares (being 100% of the voting capital) of Intelenet which holds 51% of the voting capital of the company.

Since the acquisition of the equity shares of Intelnet by SKR BPO Services results in an indirect acquisition of control of the company, SKR BPO will make an open offer to purchase up to 3.23 million fully paid-up equity shares (20% of the issued share capital of the company) at an offer price of Rs 200 per share for a total offer consideration of approximately Rs 64.59 crore.

Renu S Kamad, executive director, HDFC, said: "HDFC launched Intelenet at a time when the BPO sector was developing rapidly. We are happy to have been associated with Intelenet in its journey towards growth and leadership in the BPO industry. The BPO business today needs more focus and we believe the new arrangement will provide the right impetus. We see the development as a win-win for all of us. We wish the management of lntelenet all success."

Intelenet started out in 1994 as a 50:50 joint venture between Tata Consultancy Services (TCS) and HDFC. In 2004, TCS sold its stake to HDFC for Rs 161 crore when it decided to focus on its own business process outsourcing (BPO) business. Subsequently, HDFC sold 50% to the UK-based Barclays, which was looking to outsource back-office processes to India.