The Indian BPO industry has been on a roll in both voice and non voice operations in recent years and this industry recently achieved a milestone by clocking revenues of USD 100 billion in 2011. As the industry continues to grow there is a lot of consolidation happening in this sector. The industry is witnessing mergers and acquisitions like never before. Companies like Genpact, Sutherland and Infosys are looking to acquire companies like Apollo BPO and Firstsource.
Very recently in September 2011, there were reports that Apollo Hospitals is looking forward to sell its stake in its BPO arm, Apollo Health Street. One the sidelines of an event held by FICCI, Executive Director Operations of Apollo Hospitals, Ms. Sangita Reddy had commented that they are planning to reduce their stake in the BPO arm and not thinking of entirely selling it off. Apollo Health Street was started in 1999 and offers services to support telemedicine, training, research programs and health education.
Now the reports are abuzz that both Sutherland and Genpact are looking to acquire Apollo BPO. The deal is expected to get valued over USD 220 million. Sutherlands is said to be the frontrunner in this process it is believed that they have put in a higher bid. Apollo has been seeing their BPO operations as a non core activity and has been open to divesting its stake in the past. This acquisition will help the players like Sutherland and Genpact to extend market share in healthcare BPO segment which is expected to benefit from the reforms happening in this sector in US.
The BPO industry has been witnessing acquisitions in the past also like last year Genpact acquired EmPower Research and Heastrong as part of its plans to expand into consulting and business research practices. This year reports suggest more such acquisitions are due for 2012 and companies like Firstsource are also planning to sell of its stake. Infosys is expected to buy a stake in Firstsource. Genpact is also said to acquire Atyati Technologies which is a leading service provider of private cloud platform for financial inclusion services.
As the BPO industry in India grapples with multiple issues like high volatility of Indian Rupee, lack of support from government with friendly policies, elections in UK, Russia, France and US and global slowdown, the industry is set to undergo a transition. As the firms move to value added outsourcing, companies may look for acquisitions as a means of pursuing growth.