India's Essar's Aegis Unit Considers Europe, Emerging Markets Acquisitions

Aegis Ltd., an outsourcing unit of India’s Essar Group, will pursue acquisitions in the Middle East, Europe, Latin America and Africa during the next two years.

The company is targeting deals in the $50 million to $200 million range and intends to complete one each quarter, Managing Director Aparup Sengupta said in an interview in Mumbai. Aegis recently acquired SLM Corp.’s call center in Texas and may close its $45 million purchase of a stake in AGC Networks Ltd. as early as this week.

“We will continue to run a double cylinder engine; going for growth through organic and inorganic routes,” Sengupta said. “We’re being opportunistic, we’re assessing assets, and at any point in time when we like something, we’d be very happy to acquire it.”

Aegis joins rivals Cap Gemini SA and HCL Technologies Ltd. in signaling that the pace of deals in the information technology industry may be picking up as demand for outsourcing and consulting services increases. Global spending on information technology goods and services is expected to rise 7.8 percent to $1.58 trillion this year after falling 8.9 percent in 2009, according to a Forrester Research Inc. report last month.

Aegis last year bought CCN Group Ltd., a call-center outsourcing company in Johannesburg, and acquired U.S.-based PeopleSupport Inc. for $250 million in 2008.

In May, the company announced two more deals; its acquisitions of U.S. student loan provider SLM’s 350-person back-office in Killeen, Texas for an undisclosed sum, and Avaya’s 59 percent stake in Indian communications services company AGC Networks for $45 million.

Geographic Spread, Depth

“Our thesis of growth is either geographic spread, or depth in domain,” Sengupta said. In Africa, the company’s focus is serving customers in the telecommunications, utilities and banking industries, he said.

Aegis is doubling its workforce to 700 employees by the end of October at its Killeen, Texas call center and will double its headcount in Africa to 2,000 in the current fiscal year, Sengupta said. The company is also looking to build support centers in Ghana, Nigeria, and Cape Town, South Africa, he said.

To contact the reporter on this story: Ketaki Gokhale in Mumbai kgokhale@bloomberg.net.

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