With two mega acquisition deals signed back to back this week, KM Birla’s new-age businesses firm will finally justify its Nuvo tag.
MUMBAI: With two mega acquisition deals signed back to back this week, Kumar Mangalam Birla’s new-age businesses firm will finally justify its Nuvo tag.
Just days after signing a cheque for Rs 4,406 crore to acquire
Tata group’s stake in Idea Cellular, TransWorks - the wholly owned subsidiary of Aditya Birla
Nuvo - announced on Saturday that it is acquiring Minacs Worldwide, Canada’s largest businessprocess outsourcing (BPO) provider, for about Rs 575 crore ($125 million).
“We want to be a dominant player in every field. This acquisition will be a quantum jump for TransWorks,” declared Kumar Mangalam Birla, chairman of the Aditya Birla group, on Saturday.
“The objective will be to deliver outstanding BPO services to global clients from anywhere in the world,” he added.
Atul Kunwar, chief executive officer of TransWorks, said one of the major positives that Mincas will bring to the table is its expertise in automotive solutions.
This vertical is not a part of TransWorks’ core verticals, which include banking & financial services and telecom. Transworks contributed 5% to the total revenues of Aditya Birla Nuvo, will after the acquisition see its contribution in the total Nuvo revenue pie touch 15%.
The new age businesses of insurance, telecom and BPO will vault to about half of the Nuvo revenues, roughly about 45% of the total income, say Nuvo officials. TransWorks, Nuvo’s BPO outfit will from a minion, ranked 15th in the overall Indian BPO rankings, vault itself to the top three in the pecking order of Indian BPOs.
For Aditya Birla Nuvo, the latest acquisition will enable Transworks its 100% subsidiary to grow 7.5 times its present size. Transworks reported annual revenues of US $ 35 million (Rs 161.35 crore), while MINACS, the Canadian BPO company reported annual revenues of US $ 265 million (Rs 1219 crore). It was only last year in September, while announcing the merger of Indian Rayon, Indo-Gulf Fertilisers and Birla Global, Kumar Mangalam Birla made a statement that few believed his group could achieve. “We are at a vantage point.
It’s an opportunity and an exciting future ahead of us. The growth engines will be the new economy businesses going forward.” The reason for the merger was ostensibly to release funds from money-spinning businesses like fertilisers and carbon black into cash-guzzling growth drivers like financial services, telecom and BPO.
The brick-and-mortar have raked in the cash but do not have enough growth outlets where the funds can be invested for expansion.
“Fertilisers, textiles and carbon black are throwing up a lot of cash and we intend to use that for businesses growing at a fast clip It creates a company that captures opportunities in the evolving economy through leadership in focused value businesses” Kumar Mangalam had said trying hard to dispel notions that the dyed in the wool commodity player could make strides in the new age economy.
It’s a different story now. For a group that’s steeped into commodity businesses of non-ferrous metals, cement, fertilisers, viscose staple fibre, carbon black etc, its futuristic plans for Aditya Birla Nuvo has clearly gained traction.
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