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Will Intelenet change its identity and CEO?

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CIOL Bureau
New Update

NEW DELHI, INDIA: The acquisition of Intelenet by Serco Group, one of the world's largest public services outsourcing companies, has not come as a surprise to anyone who follows this segment.

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Intelenet was up for grabbing and Serco wants to enhance its footprint in both BPO and India. It started with a comparatively smaller acquisition a couple of years back by acquiring InfoVision Group and the success of that gave it the confidence to acquire a larger company in India. However, the valuation is being seen as on the higher side by analysts and observers.

“We have changed our ownership multiple times,”  said Susir Kumar, the CEO of Intelenet, in a press briefing after the announcement was made, “Hopefully, this will be the last.”

Intelenet has changed its ownership five times since it was incorporated in 2000 and began operations a year later.

It started as a 50-50 JV of TCS and HDFC. In 2004, HDFC bought out TCS' stake. Soon after, HDFC sold that stake of 50 per cent to Barclays of UK. 

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After three years, Barclays got out selling stake to private equity firm Blackstone Group. In October last year, Barclays, which is a client of Intelent, repurchased about 13 per cent stake in Intelenet. With this acquisition by Serco, HDFC, Barclays and Blackstone will exit.

Also Read: BPO 3.0: Changing face of global BPO industry

What is interesting is that despite changing its ownership so many times, Intelenet is the only BPO company from among the first generation of such companies (those that started in 1999-2000 period) which has not changed its name.

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While others like Spectramind, Daksh, CustomerAsset, and Tracmail which started around that time have been acquired and have lost their original names, a few others like vCustomer and 24/7 Customer have not changed their ownership and names, though the later dropped the suffix.com from its name.

Interestingly, Intelenet's CEO, Susir Kumar is also the only employee CEO - as opposed to promoter CEOs - who has continued as the CEO of the company from the beginning. There are many BPO companies that have started much later and have changed their CEOs multiple times.

Though not widely known, this is a unique record that Kumar holds - an amazing feat considering the frequent management changes that this industry is infamous for.

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The question is: will the 'final' acquisition by Serco result in change of the identity and leadership for the company?

Initial indications are that while Kumar may continue as CEO, the Intelenet name may be dropped. Serco changed the name of InfoVision after it acquired the company to Serco BPO and Intelenet and the existing Serco BPO (erstwhile Infovision) will be integrated, according to the official statement.

By making two large acquisitions with broadly the same positioning - larger domestic play and smaller offshore component - Serco has made its intention clear that it wants to tap the domestic market.

“ When we look at a market, we look at two-three years ahead. I think India will be a big market in two to five years time. Right now, we bought a business that is 24 million sterling. That is very small. So, what we have done is that we have got a team that is aligned to our culture and we will help them with resources. Immediately, we will grow in the BPO sector itself from being third to number one,” said Chris Rajendran Hyman, CEO of Serco, in an interview to Dataquest a few months after the InfoVision acquisition.

With this acquisition, he has done it.

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