British company comments on its business process outsourcing subsidiary.
British utilities company United Utilities said that its business process outsourcing subsidiary Vertex Data Science is not for sale.
The announcement from United Utilities came in the wake of newspaper reports in India and the United Kingdom that Indian outsourcer Tata Consultancy Services (TCS) may be interested in acquiring Vertex.
United Utilities has a clear strategy for Vertex and no plans to sell it, said Evelyn Brodie, head of corporate and financial communications at United Utilities, on Thursday via e-mail.
However, a number of prospective buyers have expressed interest in Vertex, and United Utilities thought it would be sensible to ask investment bank Merrill Lynch & Co. to advise on these, Brodie said, declining to mention the potential suitors.
A report Thursday in India’s largest daily, The Times of India, said that TCS was looking to buy Vertex for between $800 million to $1 billion. Earlier this week, the Daily Telegraph in the United Kingdom quoted industry experts as saying that Indian conglomerate Tata Group, which owns TCS, is one likely interested party.
A TCS spokesman said Thursday that the company would not comment on market speculation.
Vertex, with its head office near Liverpool, has about 9,000 employees, including those in its service-delivery centers in India. In its fiscal year ended March 31, 2005, the company had revenue of 413.5 million pounds ($720 million at the exchange rate on March 31, 2005) and operating profit before goodwill amortization and exceptional items of 25.2 million pounds.
Vertex is now the third-largest business process outsourcing company in the United Kingdom, Brodie said. Vertex Financial Services, a new business unit set up in 2005, has signed new contracts valued at more than 40 million pounds in its life and pensions business since April, Brodie said. It also has a pipeline of opportunities worth over 300 million pounds, she added.
TCS has been expanding in a number of markets by acquisitions. Last year it acquired Comicrom, a Chilean business process outsourcing firm. TCS of Mumbai also announced in October that it would absorb 950 staff from U.K. firm Pearl Group, which outsourced its business processes to TCS. TCS has absorbed the Pearl staff into a U.K. subsidiary focused on the insurance industry.
