Tata Consultancy Services (TCS), India's largest software and services outsourcing company, announced Tuesday that it has bought 100 percent of the equity in Chilean business process outsourcing (BPO) firm Comicrom for $23 million.
The acquisition strengthens TCS' operations in Latin America and increases the company's presence in the banking and pensions BPO (business process outsourcing) industry, according to a statement Tuesday by TCS of Mumbai.
TCS plans to use the BPO operation to address the Latin American market, where a number of multinational companies have their operations, as well as to target other Spanish-speaking markets, N. Chandrasekaran, TCS' head of global sales and operations, told reporters Tuesday in Bangalore.
A privately held company with 1,257 employees, Comicrom provides BPO services to banks, insurance companies, pension funds, government bodies and other large corporations in Chile. As part of the transaction, TCS has also acquired Comicrom's stake in an IT services joint venture it had with Comicrom.
Comicrom's chief executive will continue to head the BPO operation, according to Chandrasekaran.
Comicrom, of Santiago, had revenue of $35.5 million in fiscal year 2005. It needed large investments to grow its operations beyond Chile, Chandrasekaran said. TCS will invest in the company both to improve its technology and to expand the BPO operations, with the goal of boosting its operating margins from the current 14 percent, he said.
The acquisition is in line with TCS' focus on the insurance, banking, and pensions business. TCS bagged an order last month from Pearl Group Ltd, an insurance and pensions firm in Peterborough in the U.K., to handle its business processes. As part of the agreement between TCS and Pearl, about 950 staff from Pearl are to be moved to a new TCS subsidiary set up in Peterborough that will address the life and pension businesses.
TCS' strategy in Latin America is to increase the scale of its operations so that it can offer BPO and IT services not only to markets in the region but also to other Spanish- and Portuguese-speaking markets, including in the US, Chandrasekaran said. After the acquisition of Comicrom, TCS has 2,000 staff and over 100 customers in Latin America. TCS also has software development centers in Brazil and Uruguay, he added.