WNS to acquire Aviva's BPO unit for $228 million, secures $1 billion multi-year contract

According to WNS, it would acquire all the shares of AGS and would take control of the company's operations in Bangalore, Pune, Chennai in India and Colombo in Sri Lanka. About 5800 employees would be absorbed by WNS, pursuant to the acquisition. The deal is being touted as one of the largest buyouts of a foreign captive BPO in India.

The funds for the acquisition would be raised through a mix of internal accruals and debt, the company said in a statement. While $200 million would be raised through a bank loan facility, buyout firm Warburg Pincus, which is the majority shareholder of WNS, would make an equity contribution of $30 million, sources close to the deal said.

Pursuant to the acquisition, Aviva would become the biggest client of WNS, which would provide a complete spectrum of life and general insurance processing functions, including policy administration and settlement, finance and accounting, customer care and other support services, to Aviva's Canadian, UK and Irish businesses till the end of 2016.

Part of the outsourced job from Aviva would be subcontracted by WNS to two other Indian BPOs - EXL and 24/7 Customer, sources said.

"By combining the sale with a long-term master services agreement, Aviva will be able to realize the value of the offshoring operations it has been developing since 2003, while continuing to benefit from the expertise that it has developed in that time and ensuring protection against future inflation and adverse changes in foreign exchange rates," Aviva said in a statement.

"We're proud of the significant offshoring capability that we've built over the past five years and we remain firmly committed to offshoring," said Cathryn Riley, chairperson, AGS.

"After an extensive review, we've chosen one of our current suppliers to be our long-term partner, allowing us to build on the strength of our existing relationship to increase the flexibility and cost-certainty within our operation," Riley said.

"By transferring our captive and third-party operations to WNS, Aviva benefits from WNS' ability to bring us new perspectives and continue our focus on customer service excellence," she said.

"WNS is a great partner; it understands our business and has demonstrated its commitment to helping us develop our customer experience and shared services model, which will make an important contribution to the delivery of our 'One Aviva, twice the value' vision," she added.