Convergys Agrees to Acquire Stream Global Services

   By Tess Stynes 
 

Convergys Corp. (CVG) agreed to acquire outsourcing firm Stream Global Services Inc. for $820 million from funds managed by Ares Management, Providence Equity Partners and the outsourcing investment arm of Ayala Corp.

Shares of Convergys, which affirmed its 2013 outlook, rose 20% to $25 in recent after-hours trading.

The deal, expected to close in the first quarter, is expected to create the second largest global customer management services provider. Convergys sees the transaction boosting per-share adjusted earnings by 35 cents in the first year after the deal closes. The combined company is expected to generate annual revenue of more than $3 billion.

Convergys President and Chief Executive Andrea Ayers stated that the company expects the "combination will strengthen Convergys by diversifying our client base and enabling us to offer a wider range of customer transactions in a more cost effective manner from multiple geographies."

The deal is expected to generate annual cost savings of roughly $25 million once the companies are integrated.

A number of private-equity firms have been shedding assets lately, including Providence's recent deal to sell its 25% stake in AutoTrader Group to Cox Enterprises Inc., which was unveiled on Friday.

Write to Tess Stynes at [e-mail]

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