Business Process Outsourcing Newsletter APRIL 2012

Editorial

Dear Reader,

In contrast to the previous month, March saw a relatively moderate number of M&A transactions in the global outsourcing space. Key deals in the month include:

. Pasona Group, a leader in Japanese employment and staffing solutions, acquires a 60% stake in Bewith Inc., a Japanese provider of outsourcing and contracting services . Verisk Analytics, a leading source of information about risk, acquires MediConnect Global, a leading provider of proprietary systems and services that facilitate the aggregation and analysis of medical records . Convergys, a global leader in relationship management sells its Information Management business for to NEC Corporation, a leader in the integration of IT and network technologies that benefit businesses . Capita acquires The Security Watchdog, a leading provider of security and compliance services in the fields of employer consultancy and pre-employment and employment screening . ADP, the provider of human resource outsourcing, payroll services, tax and compliance services, benefits administration and accounts payable solutions, acquires the human resource solutions subsidiary of SHPS, a provider of benefits administration services . Mahindra Satyam acquires BPO firm vCustomer’s International operations, focussed on retail and consumer sectors

March witnessed a number of new contracts as well as contract renewals. Key contracts executed in the month include:

. Kedrios Spa, a company owned by Xchanging, signs a business process outsourcing (BPO) contract with Duemme Sgr, the asset management company of Banca Esperia dedicated to private and institutional investors, real estate funds and hedge funds . Xchanging renews its ongoing outsourcing contract with United Biscuits for 2 years, aimed at undertaking sourcing activities, and reducing non-core procurement spend . ACS wins a 10 year US$ 1.6 Bn contract for processing the claims of California’s Medicaid program . Xchanging wins a 3 year contract by a leading investment and insurance institution in the UK . Accenture wins a multiyear contract to optimize Farm Bureau Financial Services’ claims handling

Emerging Trends

. A study by Tholons, which highlights that South Asia continues to experience a stream of investment from outsourced service providers with high-value solutions to across vertical specific industries

This edition of the newsletter also includes the Avendus BPO Composite Index updated till the 4th of April, 2012. The index indicates an increase in share prices of BPO companies over the month of March 2012 with a 0.3% monthly return, 8.1% quarterly return and 4.4% annual return.

Regards,

Amit Singh

Disclaimer: The news contained herein has been taken from published sources as indicated under each item. Avendus will not be held liable for any erroneous data as published in the source indicated. Avendus also does not take any responsibility for any errors or omissions or results of any actions based upon this information.

Table of Contents DEAL SUMMARY ...... 3 PASONA GROUP TO ACQUIRE BEWITH, FROM MITSUBISHI CORPORATION ...... 3 VERISK ANALYTICS TO ACQUIRE MEDICONNECT GLOBAL ...... 3 CONVERGYS ANNOUNCES SALE OF ITS INFORMATION MANAGEMENT BUSINESS TO NEC CORPORATION FOR US$ 449 MILLION ...... 4 CAPITA ACQUIRES THE SECURITY WATCHDOG ...... 4 ADP SIGNS DEFINITIVE AGREEMENT TO ACQUIRE THE HUMAN RESOURCE SOLUTIONS SUBSIDIARY OF SHPS ...... 5 MAHINDRA SATYAM ACQUIRES VCUSTOMER'S INTERNATIONAL OPERATIONS ...... 5

CONTRACT TRACKER ...... 6 KEDRIOS WILL PROVIDE DUEMME SGR WITH BACK OFFICE OUTSOURCING SERVICES ...... 6 XCHANGING SECURES A TWO YEAR RENEWAL WITH UNITED BISCUITS...... 6 ACS, A XEROX COMPANY, TAKES OVER MANAGEMENT OF CLAIMS SYSTEM FOR NATION’S LARGEST MEDICAID PROGRAM ...... 7 XCHANGING PROCUREMENT ANNOUNCES ANOTHER CONTRACT WIN ...... 7 FARM BUREAU FINANCIAL SERVICES SELECTS ACCENTURE CLAIM COMPONENTS TO OPTIMIZE CLAIMS HANDLING ...... 7

EXPANSION ...... 9 TELEPERFORMANCE COLOMBIA OPENS ONE OF THE MOST MODERN CONTACT CENTERS IN THE COUNTRY ...... 9 ARVATO ACCELERATES GLOBAL BPO GROWTH WITH MANILA EXPANSION ...... 9 AEGIS EXPANDS ITS FOOTPRINT IN COSTA RICA ...... 10 SERCO INAUGURATES NEW FACILITY IN DEHRADUN ...... 10 GOVERNOR BOBBY JINDAL AND SUTHERLAND GLOBAL SERVICES ANNOUNCE 600-JOB BPO OPERATIONS CENTER IN ALEXANDRIA ...... 11 GENPACT STRENGTHENING U.S. CAPABILITIES AND DOMAIN EXPERTISE WITH NEW DELIVERY CENTER IN DALLAS METRO AREA ...... 12 MPHASIS EXPANDS PRESENCE IN NORTH AMERICA REGION-OPENS NEAR SHORE CENTRE IN CANADA ...... 13

MOVERS AND SHAKERS ...... 14 TRANSCOM’S CFO, AÏSSA AZZOUZI, WILL LEAVE THE COMPANY ...... 14

TRENDS AND VIEWPOINTS ...... 15 SRI LANKA AMONG TOP 20 IT/BPO PLACES ...... 15

AVENDUS BPO COMPOSITE INDEX ...... 16

OUR OFFICES ...... 18

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DEAL SUMMARY Verisk Analytics, a leading source of information about risk, announced today it has signed an agreement to PASONA GROUP TO ACQUIRE BEWITH, FROM acquire MediConnect Global, a leading provider of MITSUBISHI CORPORATION proprietary systems and services that facilitate the PASONA PRESS RELEASE [29 MARCH 2012] aggregation and analysis of medical records. Based in Sandy, Utah, MediConnect has a repository of nearly Pasona Group announced that it has decided to 10 million medical records that are digitized, indexed, acquire 3,840 shares (a 60% stake) of Bewith, Inc.'s and securely hosted online. The acquisition will further stock, from Mitsubishi Corporation, effective May 1, advance Verisk‟s position as a major provider of data, 2012. After this, Pasona Group Inc and Mitsubishi analytics, and decision support solutions in the Corporation hold a 60% and a 40% stake in Bewith healthcare industry. respectively, and Pasona Group and Mitsubishi Corporation will be cooperating in business process MediConnect uses custom-built proprietary technology outsourcing (BPO) business and contact centre to deliver medical records from facilities and provider business. The acquisition price is not decided yet. locations across six continents. The company‟s clients access the clinical data through a cloud-based As a result of the March 11, 2011 Great East Japan workflow management system. MediConnect also Earthquake, Japanese companies have a rapidly offers scheduling, retrieval, review, data validation, and growing concern about securing business continuity analytics. under such disastrous circumstances. Reflecting this trend, there is increasing demand for using “MediConnect has developed unique solutions for outsourcing services as an “insurance policy.” health plans to meet critical regulatory requirements, However, in reality there are not enough service evaluate quality of care, and enhance the efficiency of providers in Japan that can design, administer and reporting and analytics,” said Frank Coyne, chairman cover all processes of outsourcing at a national level and chief executive officer of Verisk Analytics. “We that reflects the client‟s business objective and believe MediConnect‟s capabilities and extensive challenge with an understanding of the company‟s clinical data repository will align naturally with our business strategy. Verisk Health solutions, particularly Medicare Advantage revenue management and the Healthcare Bewith intends to strengthen and expand its business Effectiveness Data and Information Set (HEDIS), base by providing best-fit outsourcing services for creating a more comprehensive offering for our clients current and potential customers, thereby helping to and incremental revenue opportunities for our enhance business productivity. To achieve this goal, enterprise.” Bewith can harness business advantages of the three companies: (I) Pasona Group‟s nationwide networks “We‟re very excited to join forces with Verisk,” said and expertise in temporary staffing services as well as Amy Rees Anderson, chief executive officer of outsourcing and contracting operations; (II) MC‟s MediConnect. “The merger will provide our customers business management capability; and (III) Bewith‟s with industry-leading, comprehensive health data and skills in business process analysis and project analytics from a single source. Combining management. MediConnect‟s innovative systems and services with Verisk‟s extensive data analytics will provide a turnkey VERISK ANALYTICS TO ACQUIRE MEDICONNECT solution that will transform the way the healthcare GLOBAL industry manages medical costs and improves the MEDICONNECT PRESS RELEASE [23 MARCH quality of care.” 2012]

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The net purchase price is US$ 348.6 million. As part of “Convergys‟ IM business has distinguished itself with a the transaction, Verisk expects to realize record of successful BSS implementations and approximately US$ 25 million in tax and positive exceptional professional services for leading working capital benefits. The transaction is expected to international communications carriers,” said Dr. close in March 2012, subject to the completion of Nobuhiro Endo, President of NEC. “The acquisition of customary closing conditions, including receipt of the IM business will enable NEC to bring even greater MediConnect shareholder and regulatory approvals. value and benefits to the service provider industry.” Verisk will use cash on hand and available capacity under its revolving credit facility to fund the purchase. Convergys expects the transaction to be completed by The transaction is expected to be accretive to adjusted late second quarter of 2012, subject to the expiration EPS in 2012. of regulatory waiting periods and other customary closing conditions. Amy Rees Anderson, who has headed MediConnect since 2004, will continue to lead the company. Under CAPITA ACQUIRES THE SECURITY WATCHDOG Rees Anderson`s leadership, MediConnect grew CAPITA PRESS RELEASE [20 MARCH 2012] significantly and currently counts among its many clients four of the five leading health insurers in the Capita announces today that it has acquired The United States, based on covered lives. Security Watchdog for an undisclosed sum. The Security Watchdog is a leading provider of security CONVERGYS ANNOUNCES SALE OF ITS and compliance services in the fields of employer INFORMATION MANAGEMENT BUSINESS TO NEC consultancy and pre-employment and employment CORPORATION FOR US$ 449 MILLION screening. CONVERGYS PRESS RELEASE [22 MARCH 2012] The Security Watchdog has around 150 clients from a Convergys Corporation a global leader in relationship range of sectors including financial services, management announced today it has signed a pharmaceutical, communications and other large definitive agreement to sell its Information corporations. It provides services across 56 countries Management (IM) business for US$ 449 million in cash and territories. The UK market for outsourced to NEC Corporation, a leader in the integration of IT screening services is currently worth around £75m and network technologies that benefit businesses and annually but is expected to grow as regulation and risk people around the world. The transaction covers all of management become an increasing focus for UK the IM business, including its Smart Revenue firms. Solutions for the telecommunications, cable, satellite, broadband, utilities, and logistics markets. Commenting on the deal, Dawn Marriott-Sims, head of Capita‟s workplace services division, said: “KPMG “NEC is acquiring a well recognized business, with research published earlier this year suggests that more solid client relationships, a strong solutions portfolio, than £2bn annually is lost in UK business because of and very talented base of employees,” said Jeff Fox, management and employee fraud in Britain, but the president and CEO of Convergys. “NEC‟s established market for employee screening is currently dominated position in the industry, global scale, and commitment by overseas firms. The acquisition of The Security to invest in the business will benefit the customers and Watchdog and its integration into Capita will enable us employees of IM. In return, the proceeds from the to provide a full service solution to private and public transaction further strengthen our balance sheet and sector employers alike. The acquisition offers genuine allow us the financial flexibility to invest in our business synergies with our existing screening and recruitment and return capital to shareholders.” business and will provide our clients with further opportunities to secure more services from Capita. It

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will also allow us to bid, independently, for large scale Closing of the acquisition is expected in the first screening and vetting contracts.” quarter of calendar 2012 and is subject to customary closing conditions. Terms of the definitive agreement Susie Thomson, The Security Watchdog‟s Managing were not disclosed. Director, commenting on the deal with Capita said: “Capita is a world class company, which is continually MAHINDRA SATYAM ACQUIRES VCUSTOMER'S developing a wide range of high quality support INTERNATIONAL OPERATIONS services. We believe The Security Watchdog will be a MAHINDRA SATYAM PRESS RELEASE [7 MARCH perfect fit into the Group‟s overall offering. We share 2012] the same service delivery ethos which can only bring more value to existing and new clients.” Mahindra Satyam, a leading global consulting and IT services provider today announced the 100% Consultancy business, The Silver Fox, is not part of acquisition of BPO firm vCustomer‟s International the deal and will continue to be operated by Terry operations for US$ 27Mn. This is the first 100% O‟Neill, the outgoing chairman of The Security acquisition by Mahindra Satyam since it became part Watchdog. The Security Watchdog has around 110 of Mahindra Group and marks the entry of Mahindra employees and is headquartered in Hampshire. Satyam‟s BPO operations into other verticals such as Retail and Consumer Technology in addition to ADP SIGNS DEFINITIVE AGREEMENT TO significantly enhancing Technical Support credentials. ACQUIRE THE HUMAN RESOURCE SOLUTIONS SUBSIDIARY OF SHPS The combination of vCustomer‟s expertise in the Retail ADP PRESS RELEASE [8 MARCH 2012] and Consumer Technology verticals with Mahindra Satyam‟s domain expertise and customer base will ADP, a leading provider of human resource further strengthen the ability to address evolving outsourcing, payroll services, tax and compliance market needs. services, benefits administration and integrated computing solutions for vehicle dealers, today Mr. C P Gurnani, CEO - Mahindra Satyam, announced that it has entered into a definitive commented “This is a landmark moment in Mahindra agreement to acquire the human resource solutions Satyam's resurgence and reflects our investment subsidiary of SHPS, a highly respected provider of appetite to enhance domain depth and global scale, benefits administration services. across diverse verticals. The focus and operations of vCustomer maps perfectly with our global operating Based in Louisville, Ky., SHPS Human Resource model - allowing for seamless integration and smooth Solutions offers a robust human resources portfolio transition of processes and associates.” that includes benefits eligibility and enrolment, spending accounts, COBRA, absence management, Mr. Sujit Baksi, Chairman of Mahindra Satyam BPO benefits advocacy, and print and fulfilment, and is a Board stated “The expertise of vCustomer aligns well natural complement to ADP‟s already strong benefits with our operations and enhances our competencies. solutions and services. The acquisition will enable We look forward to collaborating and creating new ADP to continue to enhance its benefits offering while benchmarks of excellence.” Commenting on the significantly expanding its capabilities in the areas of business outlook, Mr. Sanjay Kumar, Founder and absence management and reimbursement solutions, CEO vCustomer said “vCustomer has harnessed such as Flexible Spending Accounts (FSA), Health formidable expertise and a diversified geographical Savings Accounts (HSA) and Health Reimbursement presence across the Retail and Consumer Technology Accounts (HRA). sectors. Mahindra Satyam's synergy and commitment to investment in business growth will spur growth plans and help build new service offerings.” 5

CONTRACT TRACKER and on services dedicated to private and institutional clients, drawing on the expertise developed by Kedrios KEDRIOS WILL PROVIDE DUEMME SGR WITH to optimize back office and IT processes to support BACK OFFICE OUTSOURCING SERVICES activities”. XCHANGING PRESS RELEASE [26 MARCH 2012] XCHANGING SECURES A TWO YEAR RENEWAL Kedrios Spa, the company owned by Xchanging, a WITH UNITED BISCUITS business process and technology services provider XCHANGING PRESS RELEASE [20 MARCH 2012] and integrator, has signed a business process outsourcing (BPO) contract with Duemme Sgr, the Xchanging, the business process and technology asset management company of Banca Esperia services provider and integrator, announces today a dedicated to private and institutional investors, real two year outsourcing contract with United Biscuits, a estate funds and hedge funds. leading European manufacturer of biscuits and snacks.

This contract, for the lease of the back office structure, Xchanging has been working with United Biscuits is the first one of its kind signed in Italy in the asset since 2004 in the UK and Continental Europe. This management industry. The scope of the contract continuation of the procurement partnership covers includes the outsourcing of the IT processes for the United Biscuits‟ operations in France, Belgium and entire portfolio management back office operations for Netherlands. Duemme Sgr‟s real estate funds and hedge funds provided to institutional and private investors. The five- As part of the contract, Xchanging will continue to year contract includes the transfer of employees from undertake United Biscuits‟ sourcing activities and help Duemme Sgr to Kedrios. reduce overall non-core procurement costs across their North European businesses. The categories in This contract is in addition to an earlier one between scope include Marketing, Facility Management, Human Kedrios and Duemme Sgr signed in 2002. Recently Resources and Maintenance, Repair and Operations. renewed, this contract includes IT infrastructure for the The contract will deliver operational benefits beyond support of settlement and post-trading activities, basic cost reduction and involves the re-design and application management services, such as software streamlining of business processes in line with United updates as per regulatory requirements, application Biscuits‟ strategic goals. maintenance, help desk support, surveillance reports and stock exchange calendar updates. Commenting on the contract, Mr Richard Blundell, Procurement Controller – Indirects, at United Biscuits Massimiliano Monfreda, CEO of Kedrios Spa, said: said: “Xchanging continues to demonstrate their ability "This new contract, which expands our existing to deliver value in our outsourced portfolios. We are collaboration with Duemme Sgr, is proof of the quality very pleased to be extending this relationship.” of the service provided during the last ten years. It is also a demonstration of how, at a time of increased Gonzague de Thieulloy, Trading Director at focus on business processing efficiency, Kedrios is a Xchanging, said of the deal, “We have had a great leading innovator thanks to the global expertise relationship with United Biscuits over the past seven delivered by Xchanging”. years and I am extremely proud that we have secured this two year contract renewal with our very first Filippo Di Naro, CEO and Chief Investment Officer of customer in Continental Europe.” Duemme Sgr, said: “This agreement is very important because it improves the offerings and solutions for customers. The new operation allows Duemme Sgr to focus its internal professionals on the core business 6

ACS, A XEROX COMPANY, TAKES OVER Xerox operates Medicaid systems for 11 other states, MANAGEMENT OF CLAIMS SYSTEM FOR the District of Columbia and the U.S. Department of NATION’S LARGEST MEDICAID PROGRAM Labor and annually processes more than 570 million XEROX PRESS RELEASE [20 MARCH 2012] Medicaid claims and US$ 50 billion in payments.

ACS, A Xerox Company, has taken over management XCHANGING PROCUREMENT ANNOUNCES of the claims processing system for California‟s ANOTHER CONTRACT WIN Medicaid program, known as Medi-Cal. It‟s the nation‟s XCHANGING PRESS RELEASE [8 MARCH 2012] largest Medicaid program, serving 7.5 million people. Xchanging, the business process and technology The transfer of California‟s Medicaid Management services provider and integrator, today announces that Information System, or MMIS, to Xerox is considered a it has been awarded a three year procurement major milestone under a 10-year, US$1.6 billion services contract by a leading investment and contract signed in 2010 by ACS, which was acquired insurance institution in the UK. by Xerox in February 2010 and now goes to market under the Xerox brand. Since assuming operational Under the contract, Xchanging will provide a range of responsibility in October 2011, the company has procurement services, including the provision of processed more than 90 million claims totaling US$7.5 technology, helpdesk and expert sourcing services. billion. In addition, Xchanging will provide „Tail Spend “This important change advances our goal of Management‟, looking for opportunities to create improving delivery of services while also increasing the savings by rationalizing spend with the 80% of efficiency of programs,” said Toby Douglas, director, suppliers that account for only 20% of this customer‟s California Department of Health Care Services. overall spend profile.

Xerox will enhance the current MMIS by making it Ed Cross, Head of Procurement Services - Europe, more efficient and giving the state more control over commented: “I am delighted by this deal as it how it pays health care providers including physicians, demonstrates that our new go-to-market approach for pharmacies and hospitals. procurement services is paying dividends. It continues to build on the momentum in the global market place The next milestone will be when Medi-Cal moves to a that we‟ve gained with the two contracts announced in new MMIS called Health Enterprise, which will give August 2011, one with L‟Oréal in Europe and the California flexibility to even more precisely and quickly second with BAE Systems in North America”. pay claims, and prevent fraud and abuse. Health Enterprise meets Medicaid Information Technology FARM BUREAU FINANCIAL SERVICES SELECTS Architecture (MITA) standards so the state can ACCENTURE CLAIM COMPONENTS TO OPTIMIZE maximize federal funding. CLAIMS HANDLING ACCENTURE PRESS RELEASE [7 MARCH 2012] “Our long-term partnership with California is designed to give the state innovative health care tools at a time Accenture announced today that its claims when agencies are looking for ways to make the most management outsourcing division, Accenture Claim of their budget dollars,” said Will Saunders, group Components, has been selected by Farm Bureau president, Government Healthcare Solutions, Xerox. Financial Services to serve as the insurer‟s core claims “Our successful takeover of the system means the processing system for its personal and commercial state can continue to make quality of care a top lines. The new system will help Farm Bureau Financial priority.” Services streamline its claims processes and improve its customer service. 7

“Taking care of our customers when they‟ve experienced a loss is our number one priority,” said Dan Pitcher, General Manager, Farm Bureau Property & Casualty Insurance Company and Western Agricultural Insurance Company. “We were looking for a system with the technology to support all facets of claims processing and increase automation so that our agents and adjusters can focus even more on our customers. After an extensive vendor analysis, including a detailed proof of concept, we were pleased to select Accenture Claim Components to help meet our claims support needs.”

“We are pleased that Farm Bureau Financial Services has selected Accenture Claim Components as the core system supporting their personal and commercial lines claims initiatives,” said Michael A. Jackowski, global managing director of Accenture Software for P&C insurance. “This is a clear indication that the technology and processes contained within Accenture Claim Components lead the industry and address the needs of insurers of all sizes.”

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EXPANSION people makes me sure there is a great future for Teleperformance Colombia”. TELEPERFORMANCE COLOMBIA OPENS ONE OF THE MOST MODERN CONTACT CENTERS IN THE ARVATO ACCELERATES GLOBAL BPO GROWTH COUNTRY WITH MANILA EXPANSION TELEPERFORMANCE PRESS RELEASE [29 ARVATO PRESS RELEASE [28 MARCH 2012] MARCH 2012] Business process outsourcing (BPO) partner arvato is Teleperformance, the largest global provider of increasing investment in its Manila operations to customer experience management outsourced support multimillion-dollar BPO programs for some of services, announced today that it opens one of the the world‟s leading brands. arvato has already most modern Contact Centers in Colombia. increased its highly skilled workforce in the region by Teleperformance Colombia thus continues to 50% in the last six months. The expansion plans will consolidate its leading position in the Contact Center enable a 50% growth in headcount over the next 12-18 and BPO market in this country. months and revenue growth of up to 25% over the next three years from the region. The new and modern site, with the highest global standards in terms of technology, innovation and This investment supports arvato‟s strategy of providing environmental sustainability, enables the company to secure infrastructure, high-quality dedicated client enter the near shore market. Capable of teams, and best practice frameworks for global accommodating 1,727 employees across a surface organizations seeking to align and standardize area of 26,000 square feet, including 1,100 new processes for their global customer base. bilingual English - Spanish workstations, it will allow the demanding American market to be served to the arvato has developed its Manila presence over the last highest standards. four years to provide multi-lingual, multi-geographic, 24/7 support across a range of services, including This new operations center will strengthen the delivery revenue processing, query management and customer of Teleperformance services from Colombia to the services. To meet client requirements, the site world. Today Teleperformance Colombia has 8,000 provides a secure Payment Card Industry (PCI) employees, distributed among its 7 sites in Bogota and compliant environment with the latest security Medellin. technologies and features, and is International Standard on Assurance Engagements (ISAE) No. “We feel extremely pleased with this new business 3402 audited. achievement consolidated in this modern site, from which we will serve the growing demand for Contact Client programs serviced from the site include arvato‟s Center and BPO services in Colombia. This is a highly global contract-to-invoice partnership with Microsoft, strategic investment for the Group, which will allow us which processes 90% of the company‟s global to demonstrate to our clients the huge benefits that the revenues as part of a five-year, $200 million contract country has regarding qualified talent, infrastructure with the objective to deliver a market-leading and technology”, asserts Juan Rodrigo Hurtado, the experience for Microsoft‟s partners and customers. Company´s CEO in Colombia. “arvato‟s site in Manila is only Microsoft‟s second Likewise Daniel Julien, global Chairman and CEO of offsite facility in Asia,” explained Mark Stanley, Teleperformance, emphasized “This new site is Director, Global Programs and Service Delivery, absolutely beautiful, it is one of our best sites in the Microsoft. “We consolidated services from multiple world, and what I‟ve seen in terms of facilities, sites into Manila, and it was up and running in record management process and true commitment to our time. The move has helped provide us with a high- 9

quality, low-cost option while maintaining our complex acquisition, reservations, technical support, and regulatory compliance requirements. We look forward collections. The new Aegis Tower will be the perfect to continued success from the region.” blend of additional capacity and reduced costs. It will provide us with 25 per cent more agent seats and a According to Gillian Joyce Virata, Senior Executive substantial savings in lease cost, in a logistically better Director, Business Processing Association of the section of San Jose.” Philippines (BPAP), the IT-BPO industry in the Philippines grew 24% in 2011 to generate over US$11 He further added, “We are expanding our client billion in revenue and employment of an estimated engagements for many of the world's leading brands. 640,000 professionals. Key to the industry‟s continued This along with our continued growth in the U.S. growth is the country‟s highly skilled labor force and underlies our commitment to growth in the region.” factors such as business environment and infrastructure. “Industry leaders such as arvato are Aegis Tower will serve as the company's primary paving the way for the delivery of innovative, high- location in the country. The company has already value services from the Philippines. The company‟s moved client engagements into the centre with more to commitment is a testament to the business potential come. and level of talent available in the country,” Virata said. SERCO INAUGURATES NEW FACILITY IN “Our Manila location provides organizations with a DEHRADUN highly skilled, flexible and reliable workforce combined EFYTIMES ARTICLE [19 MARCH 2012] with a secure, high-spec infrastructure that can be mobilized in days, not months,” said Debra Maxwell, Serco, a leading FTSE 100 international service Country Manager, Philippines and Global BPO company that acquired Intelenet Global Services last Director, arvato. “Expanding our capabilities in Manila year, today achieved another milestone in expanding enables us to grow our partnerships with existing its regional footprint by inaugurating a new facility in clients, as well as provide a compelling proposition for Dehradun. organizations looking to reduce costs and standardize global operations.” The facility is located at Dehradun IT Park, Sahashtradhara Road. The centre has the capacity to AEGIS EXPANDS ITS FOOTPRINT IN COSTA RICA seat 225 associates who will provide business process AEGIS PRESS RELEASE [21 MARCH 2012] outsourcing services to clients in the telecommunications industry. The centre will service Aegis, a global outsourcing services provider and part prepaid, postpaid and 3G cellular subscriber base of of the US$ 17 billion Essar Group, announced today BSNL- in the telecom circles of Uttar Pradesh & that it is expanding its footprint in Costa Rica by Uttarakhand. Serco is in the process of expanding the opening a 900-seat call centre in Rohrmoser, San facility to cater to its other domestic and International Jose, Costa Rica, close to the U.S. Embassy and the clients and is targeting to employ over 2000 staff in the National Stadium. next 18 months.

“Costa Rica has played a vital part in our success. Serco group company, Intelenet, was the first BPO to Aegis began operations in the country in 2006 and set up operations in the city of Dehradun 3 years ago today we have nearly 900 employees," said Sandip and currently employs close to 250 associates in the Sen, President of Aegis Global Customer Lifecycle city. Management Business. “Our Costa Rica location serves U.S.-based clients in health care, banking, Commenting on the launch of the new facility, Mr. travel and hospitality, retail, and technology. Client Bhupender Singh, CEO, AMEAA said, “Dehradun engagements include customer care, customer offers a vast talent pool, favorable infrastructure 10

facilities and an advantageous industrial climate. The operations in May. Sutherland will begin hiring launch of this centre augments our presence in North employees in April. India and is a step forward in establishing our expertise in government & public sector outsourcing. Governor Jindal said, “We‟ve made it a priority to We offer citizen centric services to UIDAI, IT Dept & revitalize old facilities that were once the economic IRDA” engines of job creation. That‟s why when a previous company shut down here a little over a year ago, we “The new facility will play an important role in helping immediately began working with local and regional us realize our vision of offering end to end outsourcing partners to bring back a bigger, stronger, more solutions to clients and provide local employment technologically proficient partner to bring more and opportunities in the state of Uttarakhand,” added Mr. better jobs to this growing region. Our work has paid Singh. off. Sutherland chose Louisiana because of our strong business climate, unparalleled quality of life, and The launch of Serco‟s Dehradun facility comes close workforce. The company is a pioneer and leader in the on the heels of its recently launched delivery centres in global Business Process Outsourcing (BPO) industry Lucknow and Patna reflecting its commitment as the and their selection of Alexandria is a huge win for our dominant player in the domestic Indian BPO industry. state.” Serco was the first International BPO to venture into the domestic BPO sector in 2005. The domestic Indian Based in Rochester, N.Y., Sutherland Global Services BPO market is forecast to grow by around 20% per is one of the world‟s largest companies specializing in annum to US$ 2.5bn in 2014, according to Gartner. pure-play business process outsourcing. Most of its Intelenet‟s domestic business currently has client business derives from customers in the technology, relationships with leading multinational companies telecommunications and financial services sectors, across telecom, banking, insurance, consumer with half of the company‟s revenue coming from clients durables, retail, media, aviation & public sectors and who are in the Fortune 50. Over the past three years, provides services in 15 languages. Sutherland Global Services has been the leading job creator in the Inc. 5000 list of America‟s fastest- GOVERNOR BOBBY JINDAL AND SUTHERLAND growing companies. GLOBAL SERVICES ANNOUNCE 600-JOB BPO OPERATIONS CENTER IN ALEXANDRIA “Alexandria is Sutherland‟s ninth US-located SUTHERLAND PRESS RELEASE [14 MARCH 2012] operational facility and reflects our continuing commitment to create jobs in the US” stated Dilip Gov. Bobby Jindal and Sutherland Global Services Vellodi, Chairman and CEO, Sutherland Global executive Jim Myers joined Alexandria Mayor Jacques Services “the combination of the availability of the right Roy and Central Louisiana Economic Development skill-sets, high quality infrastructure and proactive state (LED) Alliance CEO Jim Clinton to announce that and city government policies made Louisiana an ideal Sutherland will open a 600-job BPO Operations Center choice and a worthy addition to Sutherland‟s world- in Alexandria. class global delivery infrastructure and network”

The 600 new jobs will pay an average salary of LED began working with Sutherland Global in August $27,000, plus benefits, and the project will create over 2011 to discuss site opportunities that ultimately led to 400 additional indirect jobs according to Louisiana the selection of Alexandria based on the strength of Economic Development Alliance estimates. Sutherland the state‟s LED FastStart™ customized workforce Global plans to invest $2.9 million to remodel an solutions and other incentives. Sutherland Global also existing 40,000-square-foot facility. Construction will is expected to utilize Louisiana‟s Enterprise Zone tax begin in March, and the company is expected to start credits for the project.

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“First of all, this office must credit the hard work of Kay and mortgage services including processing and Michiels, Alexandria‟s chief operating officer, for her underwriting. tireless efforts to see this through from the city‟s end,” Alexandria Mayor Jacques Roy said. “The Sutherland “We are thrilled to continue to grow our U.S. presence Global partnership with the city looks to be a great fit, with the opening of this center in Richardson, as it creating more private sector jobs with better pay and reinforces our strategy of providing high-end services benefits and – importantly – more diversity in clientele. onshore close to our clients,” said Scott McConnell, This diversity hopefully guarantees a long and fruitful Genpact‟s senior vice president and business leader, partnership. These jobs were needed and we welcome Americas. “We have been combining our ability to Sutherland to our community and thank LED for its apply smarter processes, analytics and technology to expert assistance.” help our clients drive continuous improvements in their operations, as well as help them make smarter “Sutherland Global Services is a world-class provider decisions by providing insights from large amounts of of back office services and process outsourcing. Their available data. Out of this new center, we will further presence in Central Louisiana is an exciting and expand our deep technology and business analytics important addition to the region‟s prosperity,” said capabilities for our clients, particularly those in the Clinton, the Central Louisiana Economic Development financial services, healthcare, consumer product Alliance CEO. “We salute our partners at the State of goods (CPG) and retail industries who are seeking Louisiana and City of Alexandria for all of their hard insights, intelligence, and process expertise to achieve work and commitment in bringing new employment dramatically better business outcomes.” opportunities for 600 Central Louisiana residents.” McConnell continued, “We chose to expand operations GENPACT STRENGTHENING U.S. CAPABILITIES in the Dallas metropolitan area because of its AND DOMAIN EXPERTISE WITH NEW DELIVERY favorable business climate, a growing and diverse pool CENTER IN DALLAS METRO AREA of skilled professionals, and central proximity to our GENPACT PRESS RELEASE [8 MARCH 2012] clients across the U.S. We are already in discussions with a number of our clients who are excited that we‟ll Genpact, a global leader in business process and be adding significant services capabilities while technology management, today announces that it has creating new professional-level jobs.” opened a new services delivery center in Richardson, Texas, a suburb of Dallas. From this new center, The opening of the Richardson center marks Genpact will be providing high-value services including Genpact‟s fourth services delivery location in the U.S., technology services, business analytics, and mortgage joining Danville, Ill., Wilkes-Barre, Pa., and Irvine, underwriting for a growing number of U.S.-based Calif. Genpact presently employs nearly 3,000 clients, thereby establishing a new Genpact hub for employees across the U.S. which is one of the these capabilities. company‟s fastest growing regions for hiring. The company has been building its talent ecosystem in the Genpact currently has approximately 50 employees U.S. with both existing employees and with new hires including 40 IT services professionals based out of the in all areas including delivery, sales and operations. In Richardson center, and at the present time is hiring for 2011, Genpact made significant investments in 25 mortgage positions to support processing for a recruiting experienced U.S.-based domain experts, major financial institution. Genpact expects to expand technology professionals, and business analytics this center to 150-200 full-time professionals over the specialists in key industries such as financial services next 12 to 18 months. Genpact will post and fill and healthcare as well as high-potential sales positions according to client demand but expects to professionals with advanced business degrees as part hire employees experienced in technology of its Sales Development Program. Genpact is development and managed services, data analytics, continuing this strategy going forward, which includes 12

working closely with colleges and universities near its proximity to the hub of Global Financial Center and our four U.S. delivery centers as well as those in focus on Banking, Capital Markets and Insurance metropolitan areas with a high concentration of made it an attractive choice. The Government of existing clients. Prince Edward Island has demonstrated significant business partnership MPHASIS EXPANDS PRESENCE IN NORTH AMERICA REGION-OPENS NEAR SHORE CENTRE IN CANADA MPHASIS PRESS RELEASE [5 MARCH 2012]

MphasiS, a leading IT services provider, today announced that it has inked a memorandum of understanding (MoU) to set up a near shore centre at Charlotte Town in Prince Edward Island (PEI), Canada to serve the North America region. Located in the same time zone, with an hour time difference separating it from New York City, MphasiS‟ PEI center will play a strategic role in the company's operations in the North American region.

The new centre will currently house 100 employees which will grow to 300 in the next two years. The center will serve local customers, especially catering to the banking and capital markets hubs located here. Employees at the PEI center will be part of MphasiS Global Delivery network and will develop and deploy integrated business solutions around application services, business process outsourcing and infrastructure management.

“We are pleased to have MphasiS investing into Prince

Edward Island and into our people. We are fortunate to have a strong presence of IT workers located in Prince Edward Island and excellent educational institutions that will continue to train future workers. Said Premier

Robert Ghiz, Prince Edward Island. “Prince Edward

Island is an ideal near shore location, with our low operating costs, access to markets, tax incentives and rebates, as well as a highly educated and skilled workforce. The relationship with MphasiS is evidence to our commitment to promote investments in our innovative thinking, our people and our infrastructure.” He added.

“Our journey of hyper-specialization requires us to enhance our Global Delivery Model with a near-shore presence in North America. Price Edward Island‟s 13

MOVERS AND SHAKERS

TRANSCOM’S CFO, AÏSSA AZZOUZI, WILL LEAVE THE COMPANY TRANSCOM PRESS RELEASE [4 MARCH 2012]

Transcom announced today that the company‟s CFO,

Aïssa Azzouzi, has decided to leave the company. Mr

Azzouzi has, on the CEO‟s request, accepted to stay in his current role until a new CFO has been appointed, and thereafter continue with the company in a consulting capacity until end of December 2012.

“Transcom is currently co-locating some central Group functions to Stockholm, Sweden. Mr Azzouzi has decided that this is a good time for him to leave the company. I would like to thank Mr Azzouzi for his dedication and important contribution to developing Transcom and leading the company‟s finance function over the past two years. I am also pleased that he will stay on to facilitate a smooth transition to the next CFO, and to oversee a number of important projects”, commented Johan Eriksson, CEO of Transcom.

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TRENDS AND VIEWPOINTS expansion of existing players and a new interest from global companies to operate out of Sri Lanka. The SRI LANKA AMONG TOP 20 IT/BPO PLACES IT/BPO and Knowledge Service industry is targeted to THOLONS PRESS RELEASE [6 MARCH 2012] grow to become a billion dollar industry by 2015.” said Madu Ratnayake, Vice President of SLASSCOM. The Tholons 2012 Top 100 Outsourcing Destinations report identified the top global cities and countries for outsourcing IT/BPO services. With the improvement in the country‟s value proposition in IT/BPO, Sri Lanka is clearly emerging as a global sourcing destination in the region. The positive socio-political developments driven by the country‟s improving security conditions have been highlighted as key reasons for attracting more companies focused on FAO (finance and accounting outsourcing) and Software Development, in addition to the vast pool of accountants and software engineers in Sri Lanka.

In this year‟s report, 14 cities have been cited from the South Asian region, with Colombo, Sri Lanka moving up the ranking by one position to number 19th position. The report highlights that South Asia is experiencing a continuing stream of investment from outsourced service providers with high-value solutions to across vertical specific industries.

Leveraging on the location advantages, recently the global IT/BPO company Mphasis (an HP Company), set up their delivery centre in Colombo to provide high- value Finance Accounting Outsourcing services out of Sri Lanka. The leading BPO service provider, First Source entered Sri Lanka with a joint venture with Dialog. Several others have set operations during the last two years, adding to the fast growing IT/BPO exports out of Sri Lanka. The reports goes on to state that the growth has also been accelerated by the conclusion of the 30-year civil strife in the northwestern region of the country paving the way for recovery and rehabilitation, serving to attract investments into the country. These positive developments in the country serves to move Colombo up one spot to 19th place this year, and remain as one of the top emerging cities in the report.

“Sri Lanka moving up the ranking highlights the improving strengths as an outsourcing destination. During the last two years, we witnessed steady 15

AVENDUS BPO COMPOSITE INDEX

The Avendus BPO Composite Index is designed to indicate the performance of listed BPO companies in India. While there are a plethora of indices which highlight the performance of the Technology sector in India, we felt that there is a need to create a separate BPO Index, given the marked differences in the nature of both the sectors.

Avendus BPO Composite Index

0.3% 4.4% 8.1%

Key Highlights

 1 month return: 0.3%  1 quarter return: 8.1%  1 year return: 4.4%

Methodology We have used the stock price date of Allsec, eClerx, EXL, Firstsource, Genpact, HOV Services and WNS weighted by their trailing twelve month revenue. The series begins at a base value of 100 on 3rd January 2007 with just Allsec, EXL and WNS. As more BPO companies got listed, we have added them to the index after appropriate scaling. The index is updated for the closing price on the first Friday of every month. We have used closing price as on Wednesday (04/04/12) for this edition of the newsletter.

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About Avendus Capital Pvt. Ltd. (“AVENDUS CAPITAL”) www.avendus.com

Avendus Capital is a leading financial services firm which provides customized solutions in the areas of financial advisory, equity capital markets, alternative asset management and wealth management. Avendus Securities through its Institutional Equities practice is able to offer clients best-in-class research-driven advice to help them take investment decisions, while Avendus PE Investment Advisors manages funds raised from its investors by investing in public markets. The Group relies on its extensive track record, in-depth domain understanding and knowledge of the economic and regulatory environment, to offer research based solutions to its clients that include institutional investors, corporates and high net worth families. Avendus Capital has consistently been ranked among the top-five corporate finance advisors in India and has emerged as the advisor of choice for cross-border M&A deals and has closed 35 cross-border transactions in the past 4 years. Headquartered in Mumbai, the firm has offices in New Delhi and Bangalore. Avendus Capital, Inc (US) and Avendus Capital (UK) Pvt. Ltd. located in New York and London, respectively, are wholly owned subsidiaries offering M&A and Private Equity syndication services to clients in the respective regions. Some of the recent deals closed by us include

Title Month - Year Of Deal Value Industry Announcement Avendus Capital advises C&S Electric in its acquisition of December, 2011 Undisclosed Industrials Etacom Group Avendus Capital, Inc. advises SPi Global on its acquisition November, 2011 Undisclosed Technology & of Laserwords Private Limited Outsourcing Avendus advises Eris Lifesciences on its private equity September, 2011 Undisclosed Lifescience transaction with ChrysCapital Avendus Capital advises Value & Budget Housing August, 2011 USD 26 mn Infrastructure Corporation on its equity raise from The Carlyle Group & Real Estate Avendus Capital advises Sara Sae on its fund raising from August, 2011 Undisclosed Industrials Multiples Avendus Capital advises AGS Transact Technologies on its June, 2011 USD 32 mn Consumer equity raise from TPG Avendus Capital advised SYSTIME on its 50% stake sale to May, 2011 USD 23 mn Technology & KPIT Cummins Infosystems Limited Outsourcing Avendus Capital advises on Serco‟s acquisition of Intelenet May, 2011 USD 536 mn Technology & Global Services Outsourcing Avendus Capital advises Diligent Power on its equity raise May, 2011 Undisclosed Infrastructure from Warburg Pincus & Real Estate Avendus Capital advises Tega Industries on its USD 35 Mn May, 2011 USD 35 mn Industrials equity raise from TA Associates Avendus Capital, Inc. advises Outsource Partners May, 2011 USD 91 mn Technology & International (OPI) on its transaction with ExlService Outsourcing Holdings, Inc. Avendus advises KPIT Cummins Infosystems Limited on its March, 2011 USD 25 mn Technology & preferential allotment of equity shares to Chrys Capital Outsourcing Avendus advises the shareholders of Devidayal Sales in a March, 2011 Undisclosed Lifescience strategic transaction with Arysta LifeScience Avendus advises Tega Industries on its acquisition of February, 2011 Undisclosed Industrials Acotec S.A., Chile

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