PE consortium buys Aditya Birla Nuvo's BPO unit for $260m

ABNL, a unit of Indian conglomerate Aditya Birla Group, said in a statement that the divestment was driven by a combination of capital requirements and a desire to pursue growth opportunities in other areas.

ABNL entered the business and technology outsourcing space in 2003 through the acquisition of TransWorks, which three years later bought the much larger Minacs for $125 million. Minacs was Canada's largest outsourcing firm with annual revenues of $265 million.

The combined entity generated a net profit of around $23 million for the 2013 financial year, with revenues reaching approximately $450 million. It employs 21,000 staff across 35 centers in three continents, offering customer management, marketing, finance and accounting, procurement and IT services.

CX, which was set up in 2008 by Ajay Relan, former India head at CVCI, is currently investing its $515 million debut fund.

Capital Square is run by Sanjay Chakrabarty, who previously led India and Southeast Asia investments for Columbia Capital, Aparup Sengupta, ex-CEO of Essar's BPO unit Aegis, and Mukesh Sharda, formerly India country head for Avenue Capital Group. The firm invests the partners' principal capital in private companies, usually forming consortia with other PE players.

Capital Square also participated in Partners Group's $270 million buyout of BPO business CSS Corp. last year.

The Minacs acquisition is expected to be completed in 2-3 months, subject to regulatory approval. It is the latest in a string of India-related outsourcing transactions, including Apax Partners' purchase of GlobalLogic and Baring Private Equity Asia's acquisition of a majority interest in Hexaware Technologies, in addition to the CSS deal.

Minacs is also an example of a carve-out from an Indian conglomerate that is looking to exit non-core businesses. ABNL reported consolidated net sales of more than $4.5 billion for the 2012 financial year. Having made its name in manufacturing and then diversified into other areas, the company is expected to focus more on retail, financial services and telecom.

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