Mumbai, May 31: British outsourcer Serco has signed a deal to acquire Intelenet, the Mumbai-based provider of business process outsourcing (BPO) services, for £385 million ($634 million, over Rs 2,800 crore).

Serco will buy the entire equity in Intelenet from private equity giant Blackstone, British bank Barclays, mortgage financier Housing Development Finance Corporation and the management team of Intelenet. The acquisition is part of Serco’s game plan to enter new markets and sectors to spur growth.

Intelenet has 34 global delivery centres across seven countries and it provides various back-office services to industries such as financial services, travel, healthcare and telecom.

Blackstone held close to 66 per cent in Intelenet.

HDFC, which helped create Intelenet in 2001 along with TCS, held under 5 per cent in the BPO firm. Barclays had a 13 per cent stake and the rest belonged to the management team of the company.

Intelenet will have a new board of directors after the deal is closed.

The total acquisition cost of £385 million includes contingent payments of £50 million till December 2013 and will be fully funded by Serco’s debt facilities.

Serco said these payments were dependent principally on the delivery of additional revenue to Intelenet from Blackstone portfolio companies and Barclays.

Second acquisition

This isn’t Serco’s first acquisition in India. About three years ago, it had picked up a 60 per cent stake in Gurgaon-based InfoVision Group in a deal that put the enterprise value at around Rs 200 crore.

According to Serco, the acquisition of Intelenet will provide access to attractive markets. Pointing out that the Indian BPO market alone is forecast to grow around 20 per cent to $2.5 billion in 2014 (Gartner estimates), it said there was growing demand for outsourcing as firms in the West were turning increasingly to third parties to deliver various services.

“The acquisition of Intelenet will broaden our customer and geographic reach. The business provides services to a large number of private sector customers across a range of sectors and countries. It will add to our scale and depth of capabilities. Intelenet brings a wealth of expertise in a broad range of middle and back office services,” it added.

The addressable global BPO market is estimated at $350-$500 billion, according to the Everest Research Institute.

Intelenet has 32,000 employees. Serco plans to combine its BPO-related operations with that of the Mumbai-based company. This will give rise to a 40,000-employee strong set-up that will provide services in seven countries.