Essar business process outsourcing arm (BPO), Aegis, reported that it is currently working on various strategies to hit its targeted $1 billion revenue mark. The company has been shopping for investments lately, recently investing in AGC Networks in an acquisition purchase that saw its approximated earnings stand at about $700 million with its headcount reaching 40,000.
Aparup Sengupta, Aegis MD and SEO said the company was currently considering 5 to 6 companies in the US, Latin America, Europe and Africa as potential investments. According to him, Aegis is targeting a minimum of four acquisition investments yearly, regardless of deal size. The company would seek the potential investment assets, carry out an evaluation to establish the viability of the investments before undertaking them, said Sengupta.
With that in mind, Aegis said it would not consider the size of the deal in its criterion; rather the sustainability and the economics of the investments would take precedence. The MD called it a “double cylinder engine” strategy aimed at hitting the planned $1 billion milestone, and will be undertaken through both organic and inorganic growth strategies.
The company has gone into an inorganic growth quest in a bid to establish its operations in places where the company is inexistent and acquire particular capabilities that are not at scale. The organic growth will mainly be aimed at expanding Aegis global presence and delivery mechanisms, that, when combined would result in the $1 billion company status Aegis is after, he said.
Recently, the BPO firm has been robust in its investments, making 13 new investment acquisitions in the past 3 to 4 years, with the most recent investment being the investment in the acquisition of US based Sallie Mae’s customer service centre in Texas. The Sallie Mae investment was followed by the purchase of Avaya’s 59.13% stake in AGC Networks, a communications solutions provider for $44.5 million, about Rs 205 crore.
Thus far, Aegis has raised $200 million in debt via various banks, saying it is considering all options for raising more capital, which includes an IPO. Even so, Sengupta said the company was not focused on the IPO per say, but was rather considering a range of other available options. Aegis has 17 delivery centres in India and is planning to hire 11,000 people in the current fiscal year. The company has bases in nine countries and plans to expand its global presence further to more countries.
June 21, 2010.