Ayala Corp.'s LiveIt and partners sell stake in Stream Global to Convergys

LiveIt Investments Ltd., a wholly-owned subsidiary of conglomerate Ayala Corp.,  and its partners are selling their 29 percent stake in Stream Global Services Inc. to Convergys Corp. for P36 billion or $820 million.

 

In a disclosure to the Philippine Stock Exchange on Tuesday, Ayala said LiveIt and private equity partners Ares Management and Providence Equity Partners are selling 100 percent of their respective holdings in Stream Global.

 

From the transaction, which is expected to close in the first quarter of the year, LiveIt tends to generate $145 million in net equity proceeds and Ayala P2 billion or $46 million in net gain via its subsidiary.

 

Convergys sees the acquisition as an opportunity to grow and boost its presence globally and states' side in the business process outsourcing industry, considering the impact of Stream Global's client base, geographical footprint and operations capabilities. Both companies offer customer management services.

 

“This acquisition is an important step forward in our plan for strategic growth and value creation,” said Andrea Ayers, Convergys president and CEO.

 

“Both Convergys and Stream have a history of commitment to our clients, and dedication to excellence in representing the world’s largest brands,” Ayers noted. “We expect this transaction to be highly accretive and to allow us to leverage our strong balance sheet to position Convergys for enhanced  revenue, margin improvement and EPS growth,” she said.

 

With Stream Global operations under its wings, Convergys expects revenues to leap over $3 billion – making it the world's second largest management services provider with 125,000 employees, of which more than 53,000 are Philippine-based.

 

“We believe this combination will strengthen Convergys by diversifying our client base and enabling us to offer a wider range of customer transactions in a more cost effective manner from multiple geographies, at scale,” said Ayers.

 

“Our plan is to build upon the best practices and management teams from both companies to deliver superior customer benefits and enhanced value for our clients and shareholders, and provide new opportunities for our employees,” she added. 

 

LiveIt chief executive officer Fred Ayala noted the global IT-BPO industry will stay on course expanding, “particularly in the Philippines where we expect it to remain one of the country’s top generators of new jobs.

 

“Consequently we are continuing to build our investee companies in high growth segments of the industry, and starting to invest in the education space which we see as a critical enabler in the IT-BPO industry, given its ever increasing demand for well-trained Filipino talent,” he said. – VS, GMA News