ePLDT TO ACQUIRE 100% OF SPI TECHNOLOGIES, INC.;
ACQUISITION TO CREATE THE LARGEST FULL SERVICE
BUSINESS PROCESS OUTSOURCING FIRM IN THE PHILIPPINES
The Philippine Long Distance Telephone Company (“PLDT”) announced today that it has authorized its Information and Communications Technology arm, ePLDT, Inc. (“ePLDT”), to acquire 100% of the SPI group of companies (“SPI”).
On May 24, 2006, SPI Tech L.P. (the “Seller”), the parent company of SPI, formally accepted the letter of interest submitted by ePLDT for the acquisition of 100% of SPI (the “Acquisition”). The Seller has granted an exclusivity period within which to conduct due diligence on SPI and complete the transaction.
SPI is the 2nd largest pure-play business process outsourcing (“BPO”) company and the 9th largest independent BPO service provider worldwide.
Together with ePLDT’s Ventus call center group, the acquisition of SPI will solidify ePLDT’s position as one of the largest full service BPO companies in the industry and enable ePLDT to benefit greatly from the forecasted growth in the BPO sector.
May 25, 2006, Makati City, Manila, Philippines: The Philippine Long Distance Telephone Company (PLDT; NYSE : PHI; PSE : TEL) announced that at a Special Board meeting held earlier today, the PLDT Board of Directors authorized ePLDT, Inc. (“ePLDT”) to acquire 100% of SPI Technologies, Inc. and its direct and indirect Philippine and offshore subsidiaries (“SPI”). On May 24, 2006, SPI Tech L.P. (the “Seller”), the parent company of SPI, formally accepted the letter of interest submitted by ePLDT for the acquisition of 100% of SPI (the “Acquisition”). The Seller has granted an exclusivity period within which to conduct due diligence on SPI and complete the transaction. ePLDT engaged Credit Suisse as its independent financial adviser for the transaction.
SPI is the second largest pure-play business process outsourcing (“BPO”) company and the 9th largest independent BPO service provider worldwide. ePLDT is the Information and Communications Technology arm of the PLDT Group. PLDT will use internally generated cash to fund ePLDT’s acquisition of SPI. It is envisioned that the acquisition of SPI, together with ePLDT’s existing Ventus call center group, will solidify ePLDT’s position as one of the largest full service BPO companies in the industry.
“The addition of SPI into ePLDT will broaden our participation in the promising BPO sector which industry analysts forecast to grow at a compounded annual growth rate of 9.2% in the next 4 years. As the Philippines continues to gain recognition as a preferred location for BPO services, the PLDT Group remains in the forefront as a partner in further developing this market in the years ahead,” said Napoleon L. Nazareno, President of PLDT.
SPI Profile
SPI operates in 23 locations spanning North America, Europe and Asia, servicing over 150 customers including many Fortune 500 companies. With over 6,500 employees worldwide, SPI services these customers onsite, and from facilities in the Philippines, India, US, China (25% ownership) and Vietnam (outsourced).
SPI’s core capabilities include content editorial and production, litigation support coding and electronic data discovery, medical transcription, database structuring and management and transaction processing.
ePLDT Ventus Group Profile
ePLDT’s Ventus call center group (“ePLDT Ventus Group”) consists of Parlance Systems, Inc, Vocativ Systems, Inc. and ePLDT Ventus, Inc. The ePLDT Ventus Group operates six call center facilities located in Makati, Taguig, Pasig, Mandaluyong, Quezon City and Iloilo, rendering primarily voice-based services to large US-based clients and outsourcers.
As of 31st March 2006, the six facilities had a total of 3,690 seats and 3,842 employees. By end of 2006, the ePLDT Ventus Group is projected to expand to approximately 4,400 seats and 5,200 employees.
Consolidated audited revenues of the ePLDT Ventus Group for 2005 reached Php 1.944 Billion,
with an audited net income of Php 271.2 Million and EBITDA of Php 405.6 Million.
As of the 1st quarter of 2006, the ePLDT Ventus Group registered unaudited revenues of Php 563 Million, with a net income of Php 93.6 Million and EBITDA of Php 149.8 Million, compared to revenues of Php 408 Million, net income of Php 49.8 Million and EBITDA of 96.6 Million for the same period in 2005.
Upon completion of the acquisition, ePLDT will become one of the largest BPO service providers in the Philippines and one of the largest BPO firms worldwide, offering a wide range of voice and non-voice services.
“The operational synergies between SPI and the ePLDT Ventus Group will provide us with excellent opportunities to enhance our North American customer base, broaden our revenue streams, as well as derive potential cost synergies in the marketing and selling of our voice-based services in the countries where SPI operates”, according to Ray C. Espinosa, President of ePLDT.
The acquisition of SPI will enable the ePLDT Ventus Group to immediately enter numerous large, high growth markets and create an instant marketing presence in North America, Europe and Asia.
“The recent acquisitions of ePLDT should strengthen the Group’s ability to explore growth opportunities going forward while sustaining our commitment to expand our broadband business, extend our leadership in cellular and increase dividends to our shareholders. There is still much to be done but the Group is working relentlessly to putting the pieces together in order to capitalize on new sources of growth,” concluded Manuel V. Pangilinan, Chairman of PLDT.