Blackstone exits Intelenet for $1bn

August 2018 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

August 2018 Issue

French outsourcing giant Teleperformance is to acquire Indian-based Intelenet Global Services from private equity giant Blackstone in a $1bn deal. The acquisition, which is expected to close by 30 September, pending regulatory approval and other closing conditions, will see Blackstone exit a business it acquired in 2013 for around $385m. The firm’s return would be its largest exit in Asia to date.

Teleperformance, founded in 1978, currently has around 55,000 employees across its operations in the Americas, the UK, Europe, Middle East, India and the Philippines. The company enjoyed a strong 2017, reporting consolidated revenue of $4.7bn. For the fiscal year ended 31 March 2018, the company posted revenue of $449m, a 10 percent year-on-year increase, as well as EBITDA of $83m. For fiscal year 2019, the company forecasts significant additional revenue growth of at least 10 percent and increased profitability. The addition of Intelenet to the company will hopefully boost revenues moving forward. Teleperformance anticipates the deal will have a positive impact of around 10 percent on its earnings per share before amortisation of goodwill in 2018 on a pro-forma basis. Teleperformance has targeted revenue of $7bn by 2022.

“I am extremely pleased to welcome Bhupender and the Intelenet group to the Teleperformance family,” said Daniel Julien, chairman and chief executive of Teleperformance. “We share the same management values, the same passion for service, and the same strategic vision. Intelenet’s strong integrated solutions and digital optimisation capacities will immediately and significantly enhance Teleperformance’s offering. Intelenet’s amazing footprint in India is also an opportunity for Teleperformance to massively strengthen its presence in this key geography going forward. Thanks to the Intelenet acquisition, Teleperformance is poised to move quickly ahead with its 2018-2022 strategic plan. Moreover, upon closing this deal will be immediately accretive for Teleperformance shareholders, as it should have a positive impact of around +10 percent on the Group’s earnings per share in 2018 on a pro forma basis.”

The sale of Intelenet marks the second time that Blackstone has exited the company in the last decade. The firm first acquired a stake in 2007 before selling to Selco in 2011. In late 2015, it bought the company back for $385m. Rumours that the firm was interested in selling its stake in Intelenet first began to surface in May, with a strategic buyer rather than another PE firm expected to be its new owner.

“We have invested in Intelenet twice,” said Amit Dixit, senior managing director and head of private equity India at Blackstone. “The continued success of the company is a testament to the exceptional quality of the management team, the value delivered to its customers, and the deep engagement with Blackstone. We are excited with the transfer of ownership to an industry leading company, Teleperformance, because it ensures continuity for Intelenet’s management, employees and

customers. In addition, it provides a platform to further accelerate growth by combining Intelenet’s intellectual property with Teleperformance’s global customer base. We offer our full support and best wishes for an exciting future.”

“We thank Blackstone for an excellent partnership over the years,” added Bhupender Singh, chief executive of Intelenet. “Going forward, the management team is excited to lead Intelenet in its next phase of evolution. With the large, global platform of Teleperformance combined with the transformative services capabilities of Intelenet, we will be able to deliver even greater value to the clients of both companies. In addition, the combination will provide greater growth opportunities for our employees.”

Teleperformance will finance the acquisition through a debt facility provided by BNP Paribas, JP Morgan and Natixis.

The deal is Teleperformance’s second large India-focused deal in four years. It acquired BPO company Aegis Ltd’s operations in the US, the Philippines and Costa Rica from Essar Group for $610m in July 2014.

Richard Summerfield