Convergys pays P36B for Stream Global

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Convergys Corp. has fully acquired Stream Global Services for P36 billion, of which 29 percent of the stake was acquired from the unit of an Ayala Corp.-led business process outsourcing (BPO) investment firm.

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A statement showed that Convergys is paying as high as P36 billion for a full takeover of Stream Global, a transaction aimed to create the world’s second-largest customer management services provider with more than $3 billion in revenues.

Ayala Corp. informed the local bourse the same day that its BPO investment arm, LiveIt, together with its two private equity partners, Ares Management and Providence Equity Partners, will sell 100 percent of their respective holdings in Stream to Convergys.

Once the transaction is complete, Convergys expects to have combined revenues of over $3 billion and approximately 125,000 employees, including more than 53,000 in the Philippines.

Still subject to satisfaction of customary closing conditions, including receipt of applicable regulatory approvals, the transaction is expected to close in the first quarter of 2014.

Upon the sale, LiveIt will realize approximately $145 million in total net equity proceeds. Ayala Corp. is now expecting to realize a net gain of approximately P2 billion, or $46 million through LiveIt because of the transaction.

Fred Ayala, LiveIt chief executive officer, said in a statement that the transaction has strong strategic rationale.

“We are very proud of the Stream team, and grateful to the thousands of individuals who helped build it from an industry pioneer into a global leader,” Ayala said.

“We believe that the global IT [information technology]-BPO industry will continue to expand, particularly in the Philippines, where we expect it to remain one of the country’s top generators of new jobs. Consequently, we are continuing to build our investee companies in the high growth segments of the industry, and starting to invest in the education space, which we see as a critical enabler of the IT-BPO industry, given its ever increasing demand for well-trained Filipino talent,” he added.

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