Essar’s BPO, PeopleSupport in $250 mn merger

Aegis BPO, a leading global business process outsourcing (BPO) provider and part of Essar Group, and PeopleSupport, Inc, a leading offshore BPO provider in the US, have announced a definitive agreement to merge through Essar Services (Mauritius), its wholly owned subsidiary by a cash transaction with an aggregate equity value of approximately $250 million. This strategic combination has been unanimously approved by the boards of both companies.

Under the terms of the agreement, Aegis BPO will pay PeopleSupport stockholders $12.25 per share in cash through Essar Services (Mauritius), which represents a premium of approximately 29 per cent over PeopleSupport’s closing share price on August 1, 2008, the last trading day prior to today’s announcement. Aegis BPO will also pay a premium of approximately 42 per cent over the weighted average trading price of the company’s shares during the previous 30 trading days.

Following the merger, Aegis BPO will become a leader in the rapidly growing global BPO market with operations in India, the Philippines, the US and Costa Rica. It will have approximately 4,000 employees in the US and more than 25,000 employees in several offshore locations. Additionally, Aegis BPO will offer and benefit from greater scale, deeper domain expertise, comprehensive solution offering, financial strength, and a rich international talent pool.

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•The amount Aegis BPO will pay PeopleSupport stockholders per share, representing approximately 29% over PeopleSupport’s closing share price on August 1

•The numer of Aegis BPO’s offshore employees post the merger. The Essar Group arm will become a leader in the global market with 4,000employees in the US