Serco jumps on Indian buy
SERCO shares were among the top risers in the FTSE 100 yesterday after the outsourcing giant bought Indian back-office company Intelenet for £385m.
Serco, which has been gunning for more work overseas, said it expects the business process outsourcing (BPO) marketplace to grow up to 15 per cent a year to reach $291bn (£177bn) globally in the next five years, and that Intelenet’s £500m order book would give it a valuable inroad.
Intelenet’s customers include Barclays, State Bank of India and Tata, and the company employs around 31,000 people. UK offices at Plymouth and Fort William will remain open, a Serco spokesperson said.
Serco has bought the firm from asset manager Blackstone, with minority investors Barclays, HDFC and the firm’s management also selling stakes.
All three companies, and a number of Blackstone’s clients, will stay on as customers of Intelenet.
The purchase, funded through Serco’s debt facilities, is expected to add to the group’s earnings in the first full year of ownership. The deal must be approved by Indian authorities.
Serco chief executive Chris Hyman said the firm’s broad customer base, economies of scale and market position in seven countries made the deal a good fit. Serco shares closed 3.5 per cent higher at 575p yesterday.