London-based buyout heavyweight CVC has agreed to buy the business process outsourcing (BPO) unit of Philippine Long Distance Telephone Co (PLDT), highlighting the increasing popularity of the Philippines as an investment destination for private equity firms.
PLDT, Manila’s second-most valuable listed business, put an 80 per cent stake in SPi Global up for sale last year as part of plans to divest its non-core businesses.
Although financial terms of the deal were not disclosed, previous reports gave the company an enterprise value of about $320m, marking the largest-ever buyout in the Philippines.
The business will be acquired through Asia Outsourcing Gamma Limited (AOGL), a company controlled by CVC Capital Partners, PLDT said in a statement.
UBS acted as exclusive financial adviser to PLDT.
SPi is one of the world’s largest and most diversified BPO service providers in terms of clients, geographic presence, and capabilities, with more than 18,000 employees and operations in the US, Europe, the Philippines, India, Vietnam and Australia, and EBITDA of about $45m.
The company provides domain expertise in the customer Interaction, healthcare and publishing markets, and also provides services across industries including banking and financial services, government, information technology, media, non-profit organisations, retail, and travel.
PLDT said it will reinvest some of the proceeds from the sale into AOGL and continue to participate in the growth of the business as a partner of CVC, with an approximate 20 per cent stake.
“We see many significant opportunities within the attractive BPO segments that SPi serves and look forward to working with the exceptional team at SPi in continuing to grow the company,” CVC senior managing director Brian Hong said in the statement.
The sale is understood to have attracted interest of some of the world’s largest buyout houses, including Bain Capital and Carlyle.
CVC has invested in at least two businesses in the Philippines to date, including its acquisition of a 15 per cent stake in Philippines’ Rizal Commercial Banking Corp for $115m back in 2011.
The SPi Global deal highlights the rising popularity of the Philippines as in investment destination. The country’s economy grew an annualised 7.1 per cent in the third quarter – the second-fastest pace in Asia after China.
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