The field of potential buyers for Citigroup Global Services, the banking giant's BPO captive, is down to three, including Indian BPO notables Genpact and WNS Holdings and now Citigroup Venture Capital, the bank's own private equity group, according to a report in the Economic Times.
The Indian publication says the valuation of CGS, in which Citigroup plans to maintain a 20% interest, has dropped to $600m from a previous range of $750m to $800m. The captive is looking at revenues of some $200m this year. But the Economic Times article says Citigroup and the buyers have yet to agree on a guaranteed level of work from the bank after CGS is sold. Such arrangements are typical when companies spin off their captives; they’ll usually stay onboard for a number of years as a key client.
Fellow Indian BPO vendor Firstsource was earlier rumored to be in the hunt for CGS, but the company recently shelled out $330m for US healthcare outsourcer MedAssist, so it will likely quieten down on the M&A front for a while.