IPVG bids for top US call center firm

IPVG Corp. (IPVG) disclosed yesterday that it has entered into a Memorandum of Understanding (MOU) with AO Capital Partners Ltd. (AO Capital), a leading independent international investment house to create a special purpose vehicle (SPV) in an effort to submit a proposal to acquire a majority stake in NASDAQ listed PeopleSupport Inc., one of the top call center companies with substantial operations in the Philippines.

Both IPVG and AO Capital have agreed to infuse and raise necessary debt and equity funding from internal and third parties. PeopleSupport Inc. has more than 8,000 seats mostly in the Philippines.

In pursuit of this, IPVG and AO Capital have submitted a letter-proposal to the Board of Directors of PeopleSupport Inc. to acquire, through an all-cash offer, a majority stake of the outstanding capital stock of PeopleSupport Inc. The target valuation of PeopleSupport is $15.00 per share or a valuation of $355 million, which represents a 28 percent premium over PeopleSupport’s 60-day weighted average closing price of $11.72 as of Nov. 29, 2007.

Authority and approval to submit the proposal-letter was given by the Board of Directors of IPVG in a special meeting.

This proposed acquisition is timely given IPVG’s disclosed plans on making several strategic acquisitions in the communications and BPO space after a successful round of raising equity and debt financing from various financial institutions. IPVG has a strong track record in creating value through acquisitions and operational execution in these sectors.

Enrique Gonzalez, CEO of IPVG stated: “This offer is in line with our strategic acquisition road-map in growing and taking our bpo business to the next level. Similar to other target firms in our pipeline, we see PeopleSupport as a good acquisition given its scale, position in the marketplace and heavy concentration in the Philippines. We believe IPVG can add significant value to the operation given our fully integrated presence in the Philippines.”

Gonzalez added: “Expect us to continue making bold moves in this space as we aim to become one of the top BPO companies in the region.”

Martin Lichauco, managing director of AO Capital said: “AO Capital has been an active advisor to IPVG since its inception. The creation of this SPV serves as a foundation of our commitment to IPVG to provide resources not just for this acquisition, but also become a strategic partner of IPVG as it embarks on becoming one of the world’s leading providers of business process outsourcing services.”

IPVG currently owns IP-Contact Center Outsourcing Inc. IPCCO is a wholly owned subsidiary of IPVG and provides support on the aspects of local talent pool and facilities to enable PCCW Teleservices to extend its contact center and telecommunications solutions in the Philippines to service North American clients. IPCCO acquired the assets of GLOBAL STRIDE, a contact center operation located in IBM Plaza, Eastwood City, Libis, earlier this year.

IPVG is extremely bullish about the future of the BPO industry in the Philippines as demand for BPO services will continue to grow at a double digit pace over the next years as the overall Philippine BPO market is expected to grow to $11 billion with over 500,000 seats by 2010 from $2.1 billion and 200,000 seats in 2006.

IPVG is one of the few Philippine listed companies that are making significant investments in this sector.