WestBridge-backed Indecomm BPO on sale for $250million [India Business] [Times of India]

(Times of India Via Acquire Media NewsEdge) MUMBAI: Back-office firm Indecomm Global Services, founded by a former Unilever top gun, has initiated a sale process with the 10-year-old company valued at about $250 million, said at least three sources directly familiar with the matter.

Private equity investors WestBridge Capital, Tiger Global and promoter investor Naresh Ponnapa have mandated JP Morgan Chase to find buyers for the outsourcing firm, which has had discussions with IBM, Accenture and Cognizant Technology Services, sources added.

US private equity Kohlberg & Co dropped out after the sellers indicated preference for strategic buyers, said one of the sources mentioned earlier. The promoter could also explore a listing on the US bourses as an alternative.

The financial investors together hold 60% in Indecomm, with WestBridge Capital being the largest shareholder having 35% stake. Tiger Global and International Finance Corporation (IFC) hold the remaining 25%.

Indecomm's revenue is estimated at $120 million with operating profit in the vicinity of $25 million. A possible transaction may give Indecomm about two-fold valuations on current revenue. Indecomm has over 3,500 employees servicing clients in the mortgage, e-learning and IT services space, according to the company website.

WestBridge Capital MD K P Balaraj offered no comment while Tiger Global could not be reached immediately. Indecomm CEO Naresh Ponnapa denied the stake sale process when contacted over phone.

WesBridge's Balaraj said Ponnapa and his team have built a valuable IT-BPO platform in Indecomm, which could look at US listing or any other strategic options. West-Bridge unlocked big value from its earlier investments in IT enabled firms such as pharma analytics start-up MarketRx and software testing company AppLabs.

WestBridge-backed Ponnapa , who was the youngest board member of Hindustan Unileve, started Indecomm in 2003. He was earlier a member of the Anglo-Dutch consumer products giant Unilever's merger and acquisition team globally.

India's BPO industry has been a long rumoured consolidation play, but M&A deals in the sector have struggled. The bigger India leveraged firms like First Source, WNS Holdings and the mid-sized peers like Apollo Health Street have explored stake sale plans in the recent past.

(c) 2012 Bennett, Coleman & Company Limited

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