With 14 acquisitions in barely 40 months,Aegis the business process outsourcing arm of the Essar Group, has managed to carve out a place for itself in the top five BPO players globally.
Managing director and global chief executive officer, Aparup Sengupta, is working on being a $1-billion company in the next 12-18 months (current turnover is $700 million or Rs 3,150 crore) and believes acquisitions will be a major way of achieving this.
In a chat with Shivani Shinde, he talks on these plans. Edited excerpts:
Fourteen acquisitions in three-and-a-half years. What's the rationale?
Our focus has been on enterprise value creation.
We started with just business process outsourcing services but are now value-adding by partnering with companies to enhance their productivity and revenue. All the acquisitions that we made, or plan to do, are governed by the road map we have laid down for our growth.
The first layers started with customer life cycle management, BPO, engineering services and this has been our strategy to enter into various geographies.
Next comes technology, process and people. Technology started with infrastructure management, that is Aegis Tech. Herein falls the latest acquisition of AGC Networks.
The COPC deal that we entered a few months before is part of the 'process' strategy.
As far as 'people' are concerned, we have launched the 'Aegis Academy', which will start in August.
This is a first-of-its kind of academy that will create a new cadre of experienced people who are ready from day one. We have around 40,000 employees after the AGC acquisition.
Do elaborate on the AGC Network acquisition.
Almost 60 per cent of the global unified communications market is held by Avaya.
They wanted to embark on a multi-channel strategy when we started talks with them.
On our part, we wanted to fill the gaps in our technology portfolio.
While AGC is seen as an Avaya shop, about 40 per cent of its revenue comes from systems integration work. This gives us a footprint in the SI segment, with about 1,000 customers and presence in several geographies.
What is the next big growth target?
We soon want to be a $1-billion company. This revenue target will also shorten our sales cycle from six months to three months, since we will no longer have to necessarily run after companies for orders.
What about the IPO plans?We have no such plans for the next six months, since we will be busy with integration issues. We were looking at alternatives for raising capital for this kind of growth, hence the talk of IPO, et al.
We wanted to raise a war chest for our acquisitions.
While we were looking for this, we spoke to several people, from where talks of an IPO stemmed. Other than various modes for raising capital, IPO was also an suggestion.
Will you merge AGC Networks?
The idea is to keep the company listed as AGC Networks. We want to develop this company further. For the next six months, we want to focus on integrating this asset into our company.
How did you raise cash for the acquisitions?
The Essar Group has supported us immensely. But, we have been generating free cash flows. We are self-sustaining. All the equity investment has come from the group and we have also raised debt.
Image: Aparup Sengupta. | Photograph, courtesy Business Standard