Acquisition Effective February 28, 2007
PUNE, India. – February 26, 2007 – HOV Services (NSE: HOVS), a global Business Process Outsourcing provider in the Transaction Management, Insurance and Tax; and Enterprise Service Industries announced today that its Board of Directors unanimously approved a merger agreement that makes LASON a wholly owned subsidiary of HOVS.
The two companies combined will have trailing annual revenues in excess of $200 million. With the merger, HOVS and its global workforce of more than 11,000 employees will serve more than 50% of the FORTUNE 100® companies—including more than 4,000 active customers in the North American marketplace.
The LASON acquisition is consistent with HOVS' strategy of acquiring leading global business process outsourcing companies to deliver superior value to current and prospective clients through its globally positioned resources.
"We have already differentiated our abilities with our clients by achieving best in class results", said Sunil Rajadhyaksha, Executive Director of HOV Services.
"This acquisition allows us to leverage our expertise and accomplishments by combining the strengths of our organizations and deploying a global infrastructure to address the needs of new markets and the synergies within our expanded marketplace," said Rajadhyaksha.
The merger, according to Rajadhyaksha, will enhance marketing, servicing and delivery footprints to clients worldwide through integration, realignment and cross-selling.
The company's client's will benefit from having delivery capability from over 49 locations located in the US, Canada, India, China, and Mexico delivering end-to-end integrated solutions including document-centric applications, Workflow Management, Finance and Accounting, Electronic Publishing and Knowledge Processing services.
Ronald D. Risher, President and CEO of LASON, said, "We are very excited about this merger and look forward to our partnership with HOVS. Together, we will be able to deliver a more comprehensive and complete suite of outsourced solutions in our key markets that include Finance Administration, Financial Services, Healthcare and Publishing. In particular, the HOVS outsourced solutions in Accounts Receivables management will be of immediate interest to our established client base."
According to Rajadhyaksha the current LASON leadership and management team will remain in place and play a key role in the growth of HOVS. The transaction is effective immediately.
"We are confident that our established competence in the industries we serve will be enhanced by LASON's management and delivery mechanisms. This merger allows us to leverage their combined expertise and ours to expand opportunity for our clients and investors," said Rajadhyaksha.
Under the merger agreement, HOVS' wholly-owned subsidiary in the US ("LLC") will acquire 100% of the outstanding equity securities of LASON in a transaction valued at $148 million. The company raised $188 million of new capital from leading global institutions– $63 million in equity and a debt facility of $125 million. Upon closing, the company will have over $85 million in equity.
The acquisition is expected to be accretive to HOVS shareholders.