NEARLY two years after private equity firm Blackstone acquired BPO, Intelenet Global Services, the back-office processor is starting to see some big outsourcing contracts from the PE player’s portfolio companies. The BPO firm has won a multi-million dollar contract from a healthcare provider in the US, which is a Blackstone investee company. The contract is the second-largest for Intelenet after its number one customer Barclays, according to sources close to the development.
ET had reported that this was one of the sweeteners to the deal when the management-led buyout of Intelenet was done in June 2007. Follow-on business contracts and acquisition opportunities are some of the benefits that a large PE investor like Blackstone brings. “Blackstone holds a significant stake in the company that has outsourced work to Intelenet. It is one of the largest healthcare providers in the US and does work with patients and insurance providers,” said one of sources familiar with the details. The contract is between $250-$300 million and spread over a period of seven years, he said.
When contacted, Intelenet officials refused to confirm or deny the development. The contract will also give the BPO firm a presence in the healthcare segment, which is impacted to a lesser extent by the recession compared with financial services. Apart from this, its dependency on Barclays will come down to 25% of its revenues, said the source quoted earlier. At the time of the Blackstone acquisition, Barclays, which was a stakeholder, contributed close to 60% of Intelenet’s revenues.
“There could be more such deals in the pipeline. There is enormous pressure on companies in the US to cut costs because of the slowdown,” said another person close to the company. He said the healthcare provider would save around 65% of its existing costs because of consolidating its back-office operations and outsourcing them. “There are at least 5-6 more such contracts that are expected to come to Intelenet in healthcare segment, although they may not be as large,” said the same person.