MANILA, Philippines - Ayala Corp.-backed eTelecare Global Solutions and Stream Global Services Inc. are combining in a stock-for-stock transaction to create a global business process outsourcing company (BPO) with annual revenues approaching $1 billion in 2010.
Ayala Corp. president Fernando Zobel de Ayala said the combination of a world class company like Stream, with a Philippine leader like eTelecare, will create one of the largest and most competitive companies in the global BPO industry, which will be uniquely positioned to deliver a full range of market leading solutions to their clients.
“The combination also underscores our belief that the Philippines is playing an increasingly critical role in the outsourcing strategies of global clients, due to its many advantages, such as a large and high quality workforce and robust infrastructure,” he pointed out.
The boards of directors and principal stockholders of both Stream and EGS Corp. have unanimously approved the combination. They include Ares Management LLC and certain founding Stream stockholders representing 90.2 percent of the Stream’s outstanding shares, as well as LiveIt and Providence Equity Partners LLC, who together own 100 percent of EGS Corp.
Ares, Ayala (through LiveIt which is its holding company in the BPO sector, with significant holdings in eTelecare, Integreon and Affinity Express) and Providence will own approximately 45.5 percent, 25.5 percent and 17 percent, respectively of the combined company. Scott Murray will continue to be the chairman and CEO of the parent company, Stream Global Services, will own five percent.
Ayala’s BPO investment company, LiveIt Investments Ltd. is an investor in EGS Corp., which in turn is the indirect parent company of eTelecare.
As a result of the transaction, the current Stream and EGS Corp. stockholders will own approximately 57.5 percent and 42.5 percent, respectively, of the combined entity.
The combination of Stream and eTelecare, which generated revenues of $523 million, and $299 million, respectively in 2008, will create a global BPO leader with approximately 30,000 employees located in 50 solution centers in over 20 countries in North America, Europe, the Philippines, Latin America, India, the Middle East and Africa.
The combined company, which will operate under the Stream Global Services name globally, and under the eTelecare brand in the Philippines, will have a broadly diversified Fortune 1000 customer base, a very experienced executive team, and technical and product leadership across a wide range of industries, including the technology, retail, entertainment, media, telecommunications and financial service sectors.
The combined company will employ approximately 10,000 from eTelecare and 1,500 from Stream in the Philippines.
Company officials said it will draw upon the service strengths of each business’s integrated service offerings, which range from revenue generation, to customer care and technical support, to warranty, email and chat services.
eTelecare president and CEO John Harris noted that this is a very exciting time in the evolution of eTelecare, and enables it to be able to deliver a truly global service offering to their clients.
“This combination fulfills our strategic vision of extending our delivery capability throughout North America, Europe, Asia, Latin America and Africa. The eTelecare team is extremely excited about joining Stream to create a leading global BPO company,” Harris said.