Aug 6, 2008

[Call Centers] PeopleSupport Sold!

Don't make me say, "I told you so."

PeopleSupport corporate logoImage via WikipediaSometime early last year, I first wrote about PeopleSupport's stock concerns given how they just weren't doing all that well. I discussed some of the drivers at the time and initially speculated about the possibility of a buy-out. In the months that followed they did their best to stay afloat and fended off a rather weak buying offer in the latter part of the year.

Last Monday as they announced their 2Q financial results, they also chose to announce the potential "merger" between PSPT and Essar Services, a wholly-owned subsidiary of Aegis BPO, a BPO company based in India. Of course in reality this is a buy-out / acquisition given (1) PSPT will no longer be traded independently, (2) they're paying $12.50 per share, which is above their current market value and (3) the will be renamed as Aegis PeopleSupport (and definitely not the other way around).

Mergers are always a bit sticky, especially in the call center industry given there are bound to be redundant positions, the need to streamline processes and of course the inevitable lay-offs and added levels of management.

Another day in the aggressive call center industry. Thankfully I'm still working for a privately-traded company. That doesn't guarantee protection from changes like this, but it does leverage things a bit.
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