Teleperformance buy Aegis
In a highly anticipated deal, Teleperformance have announced that they are buying part of Aegis. The deal involves Teleperformance buying the operations of Aegis in The United States, Philippines & Costa Rica. Essar will continue to own the operations of Aegis in India, Malaysia, Saudi Arabia, Australia, South Africa, Argentina and The United Kingdom. There are a number of aspects of this deal which are note-worthy.
(1) It might seem that this is an unusual deal in that Aegis are basically carving up their business. In reality, this is fairly easy to do. Aegis does not operate a truly global operating model as others do based mainly on the fact that much of their growth has been through acquisitions. The newly-acquired companies act primarily as stand-alone organisations and so have been fairly easy to sell on.
(2) The new smaller Aegis company might seem strange to some. The company has spent a lot of time, money and effort to become a global player and this changes the organisation dramatically. It is now a regional player servicing domestic markets in India, The UK and Australia. There is some thought that Essar are now focussing on areas where the parent company has strength and experience. Essar is a major conglomerate in India and is a publicly traded organisation in The UK with substantial assets in Energy & Oil.
(3) Some of the assets remaining with Aegis now appear to not fit in well with the rest of the organisation but they will operate very much as stand-alone organisations. For example, the deal in Saudi Arabia is a domestic player and this deal will have no impact.
(4) This is basically the end of Aegis as a global player. The organisation has been highly ambitious in its global growth but there really is no going back from this.
(5) This deal further enhances Teleperformance's position as Number 1 in call centre outsourcing globally. Convergys had caught up ground on TP with the acquisition of Stream earlier on in the year. In The Philippines (the largest offshore market), this deal now enhances Teleperformance as number 2. They are still a long way behind Convergys but Teleperformance have not distanced themselves from the likes of Sykes, Sutherland and Teletech.
(6) It's clear that Teleperformance aren't buying the Aegis brand. After a period of integration, the Aegis brand will be lost and simply incorporated into the larger and more respected Teleperformance brand. What they are buying is the facilities, people and the clients.
(7) Teleperformance seem to have paid quite heavily for this particular deal. The experts are suggesting that the deal is probably at least 10% overpriced. However, this probably represents good value for Teleperformance. There is very limited overlap of clients will be seen as a positive for TP.