Vol. XXII, No. 144 [ BusinessWorld Online ]
Monday, February 23, 2009 | MANILA, PHILIPPINES
AYALA CORP. has acquired a bankrupt US-based outsourcing company as part of a plan to beef up its business process outsourcing (BPO) portfolio.
Rufino Luis T. Manotok, chief finance officer of the country’s oldest conglomerate, told BusinessWorld the firm, through BPO unit Integreon Managed Solutions, Inc., had bought Virginia-based On-site Sourcing, Inc. for $9 million.
"The company will focus on investing in the BPO industry. While its growth rate might slow down, the industry will still grow," Mr. Manotok said in an interview on Friday.
Last year, revenues of the local outsourcing industry went up by more than a quarter to $6 billion and are expected to grow by as much as a third this year.
Mr. Manotok said the company was in a strong position to invest in BPO sector after having successfully raised P25 billion last year.
"In times of stress that’s when opportunity will arise, and we do not want to be caught in a situation where there is [an acquisition] opportunity and we do not have the cash," he said.
On-site, which filed for reorganization under Chapter 11 of the US Bankruptcy Code on Feb. 5, was created in 1991 and provides electronic evidence solutions to law firms and corporations.
In a statement posted on its Web site, Integreon said it had completed the acquisition of On-Site’s secure outstanding debt before its bankruptcy and agreed to provide "debtor-in-possession financing" to assure the Virginia-based company’s continued operations throughout the reorganization process.
"The transaction will result in the creation of a $40-million national electronic discovery division of Integreon with industrial-scale processing centers in Washington, D.C. and New York City, along with review centers in the US, India and the Philippines," Integreon Chief Executive Officer Liam Brown said in a statement.
Integreon earlier said it was setting aside $5 million over the next three to five years to expand its facilities in the Philippines so it can concentrate a third of its global operations here.
Ayala Corp. has been a major player in the BPO industry. Three years ago, the conglomerate formed holding company LiveIT Solutions, Inc. to handle its investments in the BPO sector and a year after bought California-based knowledge process outsourcing firm Integreon.
Last year, LiveIT launched unit Affinity Express, Inc., which produces graphic arts for both print and online media, and in September partnered with US-based investment firm Providence Equity Partners, Inc. to buy eTelecare Global Solutions, Inc. for $290 million. — Kristine Jane R. Liu