By Tess Stynes
Convergys Corp. (CVG) agreed to acquire outsourcing firm Stream
Global Services Inc. for $820 million from funds managed by Ares
Management, Providence Equity Partners and the outsourcing
investment arm of Ayala Corp.
Shares of Convergys, which affirmed its 2013 outlook, rose 20%
to $25 in recent after-hours trading.
The deal, expected to close in the first quarter, is expected to
create the second largest global customer management services
provider. Convergys sees the transaction boosting per-share
adjusted earnings by 35 cents in the first year after the deal
closes. The combined company is expected to generate annual revenue
of more than $3 billion.
Convergys President and Chief Executive Andrea Ayers stated that
the company expects the "combination will strengthen Convergys by
diversifying our client base and enabling us to offer a wider range
of customer transactions in a more cost effective manner from
multiple geographies."
The deal is expected to generate annual cost savings of roughly
$25 million once the companies are integrated.
A number of private-equity firms have been shedding assets
lately, including Providence's recent deal to sell its 25% stake in
AutoTrader Group to Cox Enterprises Inc., which was unveiled on
Friday.
Write to Tess Stynes at tess.stynes@wsj.com
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