Baring Asia buys 35% stake in Telus International
Baring Private Equity Asia has agreed to buy a 35% stake in Telus International, the business process outsourcing (BPO) arm of Canadian telecom company Telus, at a post-deal valuation of C$1.2 billion ($930 million).
Telus shareholders will retain a 65% stake in Telus International, according to a release. The parent intends to maintain a long-term ownership position and does not plan any change in the support it provides its subsidiary, such as facilities, network and IT support. Proceeds of the investment, which Telus reported to be about C$600 million - including $425 million in incremental bank financing - will be used to support Telus' long-term broadband network expansion strategy.
"We believe that the company is in a great position to build on its past successes and establish its position as a leading international player in the space," said Jean Eric Salata, CEO of Baring Asia. "We aim to leverage our footprint and cross-border capabilities to further enhance Telus International's client portfolio and help expand its market presence."
Telus International, founded in 2006, provides customer service, IT and business support services to telecom, utilities, gaming, finance, retail and healthcare companies. It employs 22,000 people around the world, with nearly half working in the Philippines.
The parent company has been seeking to boost its balance sheet amid stagnating profits. In its first quarter earnings report Telus recorded C$3.1 billion in revenue for the three months ended March 2016, up from C$3 billion for the same period last year; however, EBITDA remained steady at C$1.14 billion, while net profit fell 9.1% to C$378 million. Telus attributed the higher expenses to restructuring costs associated with a cut of 1,500 jobs announced last year.
The Philippines has supplanted India in recent years as the dominant provider of BPO services in the world, and private equity players have been active in the space.
One of the largest deals in the sector - and still the largest buyout ever seen in the Philippines - was the purchase of SPi Global Holdings, a BPO subsidiary of Philippine Long Distance Telephone Company (PLDT), by CVC Capital Partners in 2013 for over $300 million. Recently CVC has begun looking to sell the company, with valuation suggested to be around $500 million.
More on North America
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.