Actis makes Philippines investment in Ayala’s Integreon

This is one of the few private equity deals to come out of the Philippines in the past year. Since January 2009, there have been only four deals to date, and all of them much smaller than this Actis transaction.

According to the terms of the deal, Livelt diluted its stake from 86% to 56% of issued and outstanding shares according to a filing with the Philippine Stock Exchange. This gives Actis a significant minority stake, leaving Ayala with a majority interest.

JM Trivedi, Actis’s head of South Asia, and Gautham Radhakrishnan, a director at Actis, will join Integreon’s board of directors, with Ayala keeping three seats on the board.

Fred Ayala, CEO of LiveIt said of the deal, “We are very pleased to bring in Actis as a strong new partner whose proven business building skills and deep knowledge of emerging markets will help us to take Integreon to the next level.”

In a statement, Integreon explained that with Actis’ investment, “Integreon plans to grow its range of services and technologies, launch new delivery centers, and seek strategic acquisitions.”

The deal comes coincidentally on the heels of another BPO PR tour by President Gloria Macapagal Arroyo, who has always been a cheerleader for the Philippines’ development in the BPO space, claiming expansion in the sector could lead to further economic growth for the country.

When President Arroyo took office, the industry was worth about $200,000. It has since grown to $7 billion per year, second only to India, which has seen $9 billion per annum in recent years.

“Much work remains to be done,” she said in a speech, “but I am determined to turn over to the new government, a new Philippines ready for the new challenge of bringing the nation on the verge of First World in 20 years," she said. Anecdotally, firms appear to be on board with this prediction, reporting moves to hire thousands of new employees.

Actis has also begun to focus on the possibilities BPO holds both in the Philippines and across the region. Paul Fletcher, Senior Partner at Actis said, “Outsourced professional services are one of Actis’s core investment strategies.” Actis currently counts Daksh – India’s third-largest provider of remote customer care and BPO services to Fortune 500 companies – and LMKR – a provider of information management solutions to petroleum engineering companies – among its portfolio companies.

Fletcher also added, “Integreon represents a best in class investment in this sector.” Its client roster includes leading international corporations, financial institutions and law firms that he said “harness the specialist knowledge capabilities of the emerging markets… Actis’ investment in Integreon further strengthens this link. We hold the management team of Integreon in high regard, and are excited about partnering with Ayala to drive the continued growth, profitability and ambition of the business.”

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• Topics
• Southeast Asia
• Support services
• Expansion
• Paul Fletcher
• J.M. Trivedi
• Actis Capital