Software major Tech Mahindra on Tuesday said it has acquired Hong Kong-based Hutchisons captive back office unit,Hutchison Global Services (HGS),for $87.1 million or Rs 484 crore. The acquisition will be primarily funded through debt and cash accruals. With this deal,Hutchison has completely exited its BPO business in India.
As part of the deal,HGSs clients have committed to procure services worth $845 million over a period of 5 years. HGS will become a wholly-owned subsidiary of Tech Mahindra effective Tuesday. The unit has over 11,500 employees based out of Mumbai and Pune and provides call centre and related services to customers in UK,Ireland and Australia.
Tech Mahindra acquired HGS from Hutchison Global Services Holdings (Mauritius) Ltd,a holding company of Hutchison.
We have accessed all the tax-related challenges and will comply with the regulatory norms, said Sonjoy Anand,chief financial officer at Tech Mahindra,when asked about the tax implications of the deal. The tax liability on this transaction will be borne by the seller.
The company clarified on tax liabilities in the backdrop of around Rs 12,000-crore claim by Indian tax authorities on Vodafone India after it acquired a majority stake in Hutchison Essar in 2007.
Tech Mahindra has debt of Rs 886 crore and cash positions worth Rs 280 crore as on June 30. The acquisition will bring to Tech Mahindra capabilities in the field of customer relationship management,business intelligence and IT services, said Vineet Nayyar,executive vice chairman,Tech Mahindra.
Hutchison Global Services has come to maturity and we would like to focus more on the core business of network services, said Susan Buttsworth,chief executive officer of 3
Solutions at Hutchison Whampoa (Europe),on being asked the reason the sell the BPO unit in India. FE