By Dow Jones Business News,
January 06, 2014, 05:23:00 PM EDT
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 email@example.com
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