Ayala, partner complete tender offer for eTelecare

Conglomerate Ayala Corp. and Providence Equity Partners (PEP) have completed the tender offer for all outstanding common shares and American Depositary Shares (ADS) of business process outsourcing (BPO) firm eTelecare Global Solutions Inc.

The tender offer covered about 98.7 percent of eTelecare’s outstanding shares.

eTelecare earlier announced a definitive agreement for its acquisition by affiliates of Ayala and PEP for about $290 million.

The common shares are listed on the Philippine Stock Exchange (PSE) while the ADS, each representing one common share, are quoted on the Nasdaq Global Market.

Under their cash tender offer in the United States and the Philippines, PEP and Ayala’s affiliates will pay $9 per share for “up to all of the outstanding shares of eTelecare common shares, and up to all of the outstanding ADS.”

The offer expired last Dec. 11, 2008 and was made by EGS Acquisition Co. LLC, an entity jointly owned by affiliates of Ayala and PEP.

On Dec. 8, EGS Acquisition assigned all of its rights and interests in the tender offer to its affiliate, EGS Acquisition Corp.

As of the expiration of the offer, around 18.89 million eTelecare common shares and roughly 10.39 million eTelecare ADS were validly tendered in the offer, which together represent a total of approximately 98.7 percent of eTelecare’s outstanding common shares (including common shares underlying the ADS).

Ayala said EGS Acquisition Corp. has accepted for purchase and will promptly pay, within 10 business days, for all validly tendered common shares and ADS at the offer price of $9 per share, in cash, without interest and less any required taxes or costs.

Founded in 1999, eTelecare Global Solutions is a leading provider of BPO services focusing on the complex, voice and non-voice based segment of customer care services. It provides a range of services, including technical support, customer service, sales, customer retention, chat and email from both onshore and offshore locations. Services are provided from delivery centers in the Philippines, North America and Latin America.

Ayala already had “significant holdings” in the Arizona-based firm via its holding company for the BPO sector, LiveIt Solutions Inc.

LiveIt Solutions is Ayala’s holding company in the BPO sector, with significant holdings in eTelecare, Integreon (a leading knowledge process outsourcing firm that offers outsourced legal, research and analytics services) and Affinity Express (a leading provider of outsourced graphics and creative design services).

PEP is a leading global private equity firm specializing in equity investments in media, entertainment, communications and information companies around the world. Its principals manage funds with approximately $22 billion in equity commitments and have invested in more than 100 companies operating in over 20 countries since the firm’s inception in 1989.

“This transaction allows eTelecare’s shareholders to realize significant value from their investment in eTelecare in a timely manner. The acquisition will also enhance the company’s ability to serve its valued customers.  With access to [Ayala and PEP’s] substantial intellectual and capital resources, the company will be well positioned to expand its role as a leader in the BPO marketplace,” eTelecare chairman Gary  Fernandes earlier said.

 “Our further investment demonstrates our confidence in the management team and 13,000 plus members of the eTelecare family,” said LiveIt CEO Fred Ayala. “Together with our partner Providence - the leading private equity investor in the telecom and media sectors - we will be backing the company as it continues to deliver world-class service to its clients.”

“Providence Equity is excited to partner with such a well-established and proven company as Ayala on this investment in eTelecare,” said Julie Richardson, a managing director of the equity firm and acting chief of its Asia-Pacific operations.

This transaction underscores Providence’s strategy, particularly in Asia, of partnering with local entrepreneurs and industry leaders as part of its investments,” she added. “Including this transaction, Providence has committed to deals with an aggregate investment of over $1 billion in Asia.”