Date : 9th November 2004
There’s fresh news on the Business Process Outsourcing (BPO) GE front. Reportedly, The sale of General Electric’s BPO in India, GE Capital International Services (GECIS), is close to completion. GE's Indian BPO Operations is divesting 60% of its equity stake to two private equity investors and employees namely — General Atlantic Partners and Oak Hill Capital Partners, while the employees will receive around 4-5% in stock options.
The private equity investors are together paying close to $380-400m, taking the enterprise level valuation of the BPO to around $700m. Some of the other potential buyers who had expressed interest were equity funds such as Warburg Pincus, Teases and Texas Pacific and Strategic buyers such as Infosys and Wipro.
Sources informed that this BPO giant wants to retain a stake in GE even after the sale to ensure continuity. It was earlier reported that US conglomerate’s plans to sell its BPO business moreover, GAP had emerged as one of the front-runners. The divestment would be a major event in the history of the BPO industry. One of the biggest concerns for any financial investor buying GE’s stake is the control that the BPO giant will have over future revenue flows. The top management in GECIS has been trying to derisk this by adding non-GE customers.
Earlier, the main highlight of GE was the trained manpower that was available for a fraction of the costs overseas and one that possessed excellent command over English and other language skills. Pramod Bhasin, the man who set up GE’s IndianBPO operations, would continue to run the business.
Furthermore, It’s learnt that the top management has been offered performance incentives by way of cash and higher stock allotment. Some of GE India's core businesses are transportation, energy, healthcare and financial services.
Priyanka.S.
