Quess Corp to buy business services peer Allsec Technologies
Business services provider Quess Corp Ltd is acquiring a majority stake in listed peer Allsec Technologies Ltd to boost its offerings in the customer lifecycle management segment.
In a stock-exchange filing, Bengaluru-based Quess Corp said it has signed agreements via its subsidiary Conneqt Business Solutions to initially buy a 61% stake in Allsec for Rs 272 crore ($39 million).
This includes 35.35% from the promoters and 26% from Chennai-headquartered Allsec’s private equity backer, The Carlyle Group.
Quess Corp has also made an open offer to acquire 26% more stake in a separate transaction that could cost up to Rs 145 crore.
The transaction is subject to the fulfilment of customary conditions and statutory approvals.
Founded in 2001, Allsec provides business process services in two segments globally. The first is human resources operations covering HR management systems, statutory compliances, payroll services, and time and attendance management. The second is customer lifecycle management, which encompasses lead generation, customer retention and relationship management comprising both voice and non-voice processes.
“We are confident that now is the right time to expand to larger international markets, particularly in the US, and become a frontrunner in driving business value at a time of rapid transformation,” said Adi Saravanan, founder and president of Allsec Technologies.
He further stated that there was scope for immense synergy between the two teams and they were looking forward to set new standards in delivering client lifecycle management solutions.
Quess Corp said that the acquisition was aimed at providing a diversified revenue stream for Conneqt in terms of non-voice business services.
“Through this transaction, we now have the opportunity to leverage Allsec’s global presence as well as their deep domain expertise in the HRO [human resource outsourcing] business to further deepen client relationships to drive growth and profitability for both Conneqt and Allsec,” said Ajit Isaac, chairman and managing director of Quess Corp.
Issac also added that apart from the business synergies, the transaction would be beneficial for both parties in terms of margins and cash flow conversion.
Conneqt also expects its international clientele in the areas of IT and retail to increase from 5% to 20% after the merger.
Quess, earlier known as IKYA Human Capital Solutions Ltd, was founded by serial entrepreneur Isaac in 2007. It is backed by Indian-origin Canadian billionaire Prem Watsa's Fairfax group,.
Apart from India, the company has operations in nine other countries and has a customer base of around 2,000 companies.
Quess, which has an active acquisition strategy, has picked up stakes in close to two dozen companies since 2008.
Last year, it agreed to acquire jobs portal Monster.com’s India, South East and West Asia units, HCL Infosystems Ltd’s after-sales services for consumer electronics and mobile phones, and landscaping firm Greenpiece Landscapes.