CVC buys BPO business from PLDT

CVC Capital Partners continues to make strategic investments in its third Asia fund. Its latest acquisition is the business process outsourcing (BPO) operations owned by a subsidiary of Philippine Long Distance Telephone (PLDT).

Asia Outsourcing Gamma, a company controlled by CVC, will pay more than $300 million for 80% of the BPO businesses of SPi Global, which is wholly owned by PLDT. Asia Outsourcing Gamma is held in the private equity firm’s $4.12 billion CVC Capital Partners Asia Pacific III, set up in 2008.

CVC will take majority control of the businesses and have board representation.

PLDT will retain a 20% interest in the BPO business in order to benefit from any “incremental value created” and eventually exit with CVC, said a person familiar with the transaction.

The sale is expected to be completed by March 2013, after agreed closing conditions are satisfied, according to a statement by PLDT yesterday.

UBS is acting as financial adviser to PLDT; CVC’s advisers were not disclosed.

SPi is a top BPO service provider in terms of clients, geographic presence and capabilities. Its activities include “customer interaction”, said a statement, as well as healthcare and publishing. SPi also provides services across a wide range of other industries, including banking and financial services, government, information technology, media, non-profit organisations, retail and travel.

“The transaction ... represents an opportunity for us to realise attractive returns for the benefit of the PLDT group and its stakeholders,” said Manuel Pangilinan, chairman of PLDT. “At the same time, we are very happy to be a 20% partner with CVC in the business as we remain very confident in the long-term prospects of SPi.”

“We see many significant opportunities within the attractive BPO segments that SPi serves and look forward to working with the exceptional team at SPi in continuing to grow the company,” said Brian Hong, CVC senior managing director.

PLDT is the leading telecommunications service provider in the Philippines, through its three principal business groups: fixed line, wireless and BPO.

CVC is one of the world’s leading private equity and investment advisory firms. Founded in 1981, it has 21 offices and 280 employees throughout Europe, Asia and the US. It has more than $50 billion in funds and has completed more than 300 investments in a wide range of industries and countries across the world, with an aggregate transaction value of around $167 billion.