Serco Group Announces Sale Of Its Offshore BPO Operations To Blackstone

(RTTNews) - Serco Group plc (SRP.L) announced it has agreed the sale of its offshore private sector Business Process Outsourcing operations to Blackstone. The total enterprise value and gross consideration of the transaction is approximately 250 million pounds. The operations employ 51,000 people in 67 BPO service delivery centres, of which 48,000 employees and 53 centres are in India.

Serco said it is making good progress in managing the exit from loss-making contracts in the remainder of its private sector BPO business, which are predominantly UK onshore operations. Serco continues to evaluate the potential for further disposals of remaining private sector BPO operations, together with further actions to transfer contracts, serve notice to terminate contracts early or otherwise run-off the contracts over the remaining contractual periods.

Rupert Soames, Group CEO, said: "In March 2015 we set out our strategy to focus Serco on being a leading supplier of public services. A core part of that strategy was our decision to sell our private sector BPO operations."

Serco said its overall exit from private sector BPO is estimated to be broadly earnings neutral, on a pro forma basis. Serco will use the proceeds from the transaction to reduce the Group's net debt.

Serco has previously stated expectations for 2015 for the overall Group of around 3.5 billion pounds in revenue, 160 million pounds in EBITDA and 90 million pounds in trading profit. Serco said, if the transaction completes before the end of 2015 then these expectations would be reduced to account for the residual period of 2015 that the disposed operations are no longer part of Serco.