New York-listed Genpact, which ushered in the business process outsourcing (BPO) revolution in India once as the call centre for global conglomerate General Electric's GE Capital before being spun off as an independent company, on Wednesday announced it would buy Headstrong Corp, a consulting and IT services company founded by Arjun Malhotra, earlier co-founder of HCL, for $550 milllion (R 2,500 crore) in one of the industry's biggest buyout deals.
While Genpact has its roots in Gurgaon, Headstrong was born when Malhotra-founded TechSpan with a strong base in Noida merged with James Martin Associates before being renamed. Both have US incorporation.
“With this acquisition we are gaining critical domain and technology expertise in the complex, but highly attractive, capital markets industry vertical,” Pramod Bhasin, president and CEO of Genpact said in a statement. Later during a conference call, Bhasin added that the acquisition would provide Genpact an access to Headstrong’s prime clients as well. “It is a great operational and cultural fit.”
The all-cash transaction is expected to be finalised by May 31, 2011, subject to necessary approvals.
Headstrong would initially be a separate business unit along with Genpact’s various business unit with Sandeep Sahai, CEO of Headstrong, reporting directly to him, he added.
Headstrong has around 3,700 employees across seven countries and counts nine of the world’s top investment banks and three top global asset management companies among its clients. The company generated revenues of around $217 million (R 950 crore) in the calendar year 2010. Genpact expects Headstrong’s long-term growth rate to be in excess of 20% per year.
“The company had dreams to emerge as a leader in its business verticals. For that we needed scalable infrastructure, global delivery centres across the world coupled with capabilities almost immediately. Finally we are thrilled to join Genpact,” Sahai said during the conference call.