UBS in talks with Cognizant, Genpact to sell its BPO units

Switzerland-based bank UBS, which is looking to exit its captive business and knowledge process outsourcing units, is in advanced negotiations with leading IT firms Cognizant and Genpact, said four people familiar with the development. The deal is expected to be announced soon, they added.

UBS India Service Centre, or ISC, which has two offices in Hyderabad along with its Krakow (Poland) centre, is valued at close to $100 million (about Rs 480 crore at current exchange rates), according to an executive familiar with the transaction. The deal, if it were to eventually transpire, could also include a sweetener for the new owner in the form of a multi-year contract with a committed revenue of around $400 million.

If successful, this would be the second time a global bank would be hiving off its largely India-based BPO arm. In 2008, Citigroup sold two of its captive units — Citigroup Global Services to TCS for $505 million and Citi Technology Services to Wipro for $100 million.

Between Cognizant and Genpact, the former could likely bid more aggressively as “it has been hungry for an acquisition in the captive BPO space,” said an executive from a large advisory firm who is familiar with the businesses. Also, Cognizant could leverage on the process outsourcing business in the banking and financial services (BFS) space, he added.

Genpact and Cognizant declined to comment on the deal. Pramod Bhasin, president & CEO of Genpact, said in a text message: “No comments on any M&A type of rumours please.” In an e-mailed response to ET’s query, a UBS spokesman said: “UBS continually seeks to explore commercial opportunities in all jurisdictions in which it operates that have the potential to be of benefit to the company and its component businesses. However, UBS remains committed to all its activities in India.”