The Blackstone Group has bought Intelenet, an Indian business process outsourcing firm, as it looks to cut costs across its portfolio companies.
Intelenet was a joint venture between Barclays and Housing Development Finance Corp., an Indian finance company. Blackstone is paying around $200 million (€149 million) to buy the business, according to the India-based Economic Times, in conjunction with the company’s senior management.
The business, which employs more than 17,000 people, provides BPO services to domestic and international customers. It has gross assets of about $107 million, according to a statement released by the vendors today. Under the terms of the sale, it will continue to provide offshoring services to Barclays through a dedicated Indian team.
The Indian BPO market is continuing to grow rapidly as firms continue to outsource back office functions like payroll, data processing and customer service operations. India offers an inexpensive but well-educated English-speaking workforce, although wages have been rising recently due to the steadily increasing demand from the west.
The acquisition raises the possibility of Blackstone using Intelenet to cut costs across its portfolio, by encouraging the companies it owns to outsource back office tasks to India. Intelenet chief executive Susir Kumar told the Financial Times: “Our understanding till now is that these companies have not really done a lot of outsourcing, so we think there will be a lot of opportunities for that.” The FT reports that to this end, a member of Blackstone’s synergies team, the group tasked with finding costs savings across the portfolio, will be appointed to the Intelenet board.
The Indian market is proving popular with private equity firms this year. About $2.2 billion has been invested so far in 2007, compared with $3.2 billion last year, according to data from Thomson Financial.
Blackstone was unavailable for comment.