Sunday, 20 July 2008

HCL buys Liberata’s Life & Pensions BPO operations

The slowdown in the Indian IT services marketplace (see above) didn’t seem to affect HCL M&A activities. Last week the bought Liberata’s financial services (Life & Pensions) operations. My ex-colleague at Ovum – Peter Clarke – wrote a good piece on this - Liberata sells financial services business to HCL – so I won’t repeat his points.

HCL will get four delivery centres in the U.K in Romford, Preston, Croydon, Welwyn Garden City. with 800 staff. No financial details were disclose but several Indian newswires quoted a consideration of just $2m - which seemed ridiculously low to me. According to a report in CBR the division claims to manage over four million policies and records for its clients including AXA, Barclays and JPMorgan. LFS has annual revenue of about £30m and contracts worth about £270m.

Bob Gogel, Liberata’s CEO, said that the sale will enable Liberata to concentrate on its public sector BPO activites. “Our Local and Central Government sector business and other Private sector business continues to flourish with a number of recent contract wins and fresh opportunities”.

Liberata reported revenues of c£207m in the year to 31st Aug 07 – which would put their continuing non Financial Services revenues on around £180m. In the BPO world that is pretty small. The sale to HCL probably increases the chances of a sale of the rest of Liberata. Failing that they will need to ‘bulk up’ pretty quickly – which not be the easiest of things to do right now.

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