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IBM boosts offshore capability with Indian acquisition

Big Blue has bought BPO player Daksh--its first acquisition in India.

IBM has boosted its offshore BPO capability with the acquisition of Indian call centre outsourcing firm Daksh. A price has not yet been disclosed but the fee is reported to be in the region of £70 million (US$128.8 million) to £80 million (US$147.2 million).

Daksh offers call center and back office BPO services and has over 6,000 employees. It is backed by Actis (formerly CDC), and Citigroup and its customers include Amazon.com.

The BPO market--the outsourcing of a whole function such as a call centre or HR--is predicted to grow from US$122 billion last year to US$248 billion by 2005, according to analyst Gartner.

Anthony Miller, services market analyst at Ovum Holway said the deal is a good move for both parties.

"Obviously ‘alert’ to the fact that it was a small fish in a big pond, finding a big partner made good sense if Daksh was ever to achieve its growth ambitions," he said. "For IBM, the acquisition--its first in India--strengthens even further its offshore credentials."

The deal is subject to Indian regulatory approvals and is expected to close in May.

Abraham Thomas, general manager of IBM India, said in a statement: "India is one of the fastest-growing economies in the world, and an important marketplace for IBM. This investment is indicative of our commitment to supporting our clients in this region and leveraging local capabilities to extend our leadership position in the rapidly growing business transformation services marketplace."

Silicon.com's Andy McCue reported from London.