After many a false alarm and multiple rounds of negotiations, the sale of Citigroup’s captive BPO operations has finally been concluded with Genpact winning the final bid in a closely-run race with Firstsource Solutions. The transaction is the first such sale of a large captive BPO and sets the precedent for other captive managements that were closely following the process. In terms of transaction value, it is the largest deal in the business process outsourcing segment.
The deal was reportedly done for $630 million with Genpact getting close to 90% in the 10,000-strong operation. The last round had seen some tense moments with the Firstsource turning out to be the dark horse and entering a bid higher than that of Genpact. Genpact was tipped to be the favourite all along, and Firstsource was not expected to be serious contender, more so because of its $330 million acquisition of US-based MedAssist barely a few months ago.
The Firstsource bid was around $100 million more than that of Genpact and although Citi was keen on doing the deal with Genpact, it was caught in a bind over the bids. ET had earlier reported that Citigroup had asked Genpact to match the bid put in by Firstsource. According to sources, the Genpact management considered the proposition but ultimately decided against it. The final deal was structured with Genpact agreeing to a higher bid but with a larger equity holding in the BPO, investment banking sources said.
Read more in The Economic Times article.
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