PE Firm Blackstone May Buy Back Intelenet

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Private equity giant Blackstone has made an offer to buy back the Indian BPO unit of the London-listed Serco, as formal bids were fired last week for the asset put on the block, people familiar with the matter said, according to this report. The bids have valued the Serco unit (formerly Intelenet) at $450-500 million, sources added.

Talking about the offer, Sanchit Vir Gogia, Chief Analyst and Group CEO, Greyhound Research says, “We believe that in the recent years the profits of BPOs has considerably gone down owing to the small sizes of the deals and shift of business to Philippines and other offshore locations.”

Greyhound Research believes that this has severely affected Serco’s business, hence this decision to sell Intelenet. Also, the company has been struggling with battered profits and low market value post its criminal tagging contract scandal in UK in October 2014 banning it from bidding from new government contracts.

Gogia says that Blackstone making an offer to buy back Intelenet is a rare incident in the Indian context. “Blackstone’s entry in the bidding is significant as it will help Intelenet to further strengthen its client portfolio through Blackstone invested companies,” concludes Gogia.

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