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Raja Simhan T.E.

Chennai , Aug. 17

THE Indian subsidiary of US-based Lason Inc is likely to get increased business following the acquisition of the parent by an affiliate of Charterhouse Group Inc, an American private equity firm that manages over $1.3 billion in equity.

Globally, Lason has about 2,500 employees and a significant portion of them work in Chennai. It also has centres in China and Mexico, and provides integrated information management and business process outsourcing solutions.

The Charterhouse Group acquired Lason in a transaction valued at approximately $30 million. Lason will continue operations under the same name as a subsidiary of the Charterhouse affiliate, Charter Lason Inc. The company's existing management will continue to operate Lason and will have an ownership interest in the business, according to the Lason Web site.

The Charterhouse buyout of Lason ensures that the large debt, under which Lason was operating, and the constraints of the bank groups that controlled the company, will be removed, said a source here.

Lason reported consolidated net revenues of $35.2 million for three months ended March 31, 2004 compared to $44 million for the three months ended March 31, 2003, says the company's Web site.

Since Charterhouse is a strategic investor, it will want to pump investments in a place that makes the most money i.e. India (Lason India). Further, many deals, which were falling through due to the poor financial position of the company (recently it emerged out of Chapter 11 in the US), should now see better conversion, the source said. During the Chapter 11 process, a company continues to conduct business while reorganising its finances and operations to meet the claims of those to whom it owes money.

More business is expected for the Indian subsidiary following the acquisition. Charterhouse has several companies in its portfolio with some having outsourcing opportunities, some requiring technology support and some having technologies, which can be applied cost effectively in BPO. As a result, there should be a higher business turnover for India operations, the source said without revealing the exact financial implications for the Indian subsidiary.

As far as the India management is concerned, there is no change as all operational efficiencies are driven by the initiatives of the seasoned team here, the source said.

More Stories on : Mergers & Acquisitions | Outsourcing

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