HCL Technologies may bid for Cambridge Solutions

One of India’s premier IT companies, the $1.1 bn-HCL Technologies may bid for Cambridge Solutions, one of the top BPO outfits of the country, valued at around $350 mn. If the deal sails through, it may be the biggest M&A ever in the Indian IT space.

HCL has signaled early interest to acquire around 42% promoter holding put up for sale. The promoters of Cambridge have mandated Lehman Brothers to scout for potential suitors. The promoters of Cambridge, which includes names like ex-McKinsey chief Rajat Gupta, the US-Canadian Bronfman family of Seagram fame, serial investor Ramesh Vangal and former PepsiCo chairman Chris Sinclair, together hold 59.15% stake. It is learnt that Mr. Vangal, who is the single largest individual investor with around 18% stake, is unlikely to offer his shares.

Almost two-thirds of Cambridge’s revenues comes from high-end BPO operations spread across the US, India and Europe. It has a strong presence in the lucrative insurance processing domain, with around 2000 of its total 4500 employees located in the US. HCL has BPO operations at nine centres in India, two in the UK and one in Malaysia, which provide both voice and non-voice services. The BPO operations constitute around 17% of revenues and employ around 10,000 people.

Read the article in The Economic Times article