By Lisa Kerner
Charlotte, N.C., Aug. 4 - PeopleSupport, Inc. and Aegis BPO, part of the Essar Group, agreed to merge in a cash transaction with an aggregate equity value of approximately $250 million.
Both companies' boards of directors have approved the strategic combination, it was reported in a form 8-K filed with the Securities and Exchange Commission.
The merger agreement calls for Aegis BPO to pay PeopleSupport stockholders $12.25 per share in cash through Essar Services (Mauritius).
An $8.7 million termination fee is also included in the agreement, according to the filing.
According to PeopleSupport, the offer price is a 29% premium over its closing share price on Aug. 1.
The transaction is slated to close in the third or fourth quarter of 2008, subject to shareholder approval. There is no financing condition to the merger.
Following the merger, Aegis BPO said it expects to become a leader in the rapidly growing global business process outsourcing market with operations in India, the Philippines, the United States and Costa Rica.
"PeopleSupport's solutions bring compelling value to an organization and Aegis's leadership and market strength can take PeopleSupport to the next level," PeopleSupport chairman and chief executive officer Lance Rosenzweig said in a company news release.
Credit Suisse is advising PeopleSupport, while Aegis BPO is being advised by UBS and Edelweiss Capital.
Aegis BPO is a Mumbai, India, business process outsourcing company. Essar Group is an Indian conglomerate.
PeopleSupport is an offshore business process outsourcing provider that offers customer management, transcription and captioning and additional BPO services. The company is located in Los Angeles.
| Acquirer: | Aegis BPO
|
| Target: | PeopleSupport, Inc.
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| Announcement date: | Aug. 4
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| Transaction total: | $250 million
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| Price per share: | $12.25
|
| Termination fee: | $8.7 million
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| Expected closing: | Third or fourth quarter of 2008
|
| Stock price for target: | Nasdaq: PSPT: $9.53 on Aug. 1
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