Citigroup may hive off its BPO arm to a PE investor

After the Blackstone-HDFC-Barclays BPO deal, another big player Citigroup is in talks to sell 80% stake in its BPO arm Citigroup Global Services (formerly eServe International).

The deal could be all-cash worth $700-750 million (Rs2,870-3,075 crore), valuing it at around $0.95billion.

Previously companies like IBM, TCS, Wipro, Infosys and ADP were said to be interested in acquiring the company. But now reports say that a leading Private Equity investor could emerge out to be the winner.

The likely reason for fallout of the strategic investors is the lack of long term commitment from Citi. It was only willing to offer maximum 3-year contract unlike GE which offered multi-year outsourcing contract.

Unconfirmed report cite 3i, Blackstone and Carlyle as the potential suitors.