US firm set to acquire SPI Tech

SPI Technologies Inc., Asia’s largest independent business process outsourcing (BPO) provider, is set to accept the offer of New York-based private equity firm TH Lee Putnam Venture to acquire SPI’s issued and to be issued shares for $87 million (P4.8 billion).

In a disclosure to the Philippine Stock Exchange, the Laguna-based SPI said its board of directors has unanimously voted to recommend to shareholders the acceptance of TH Lee’s offer.

TH Lee, which will commence its tender offer on or before April 12, is a technology-focused private equity firm specializing in later-stage venture transactions and middle market buy-outs. It is affiliated with buy-out firm Thomas H. Lee Partners and Putnam Investment, a global management firm with over $1.1 billion in capital commitments.

"The (SPI) board has recommended acceptance of the offer because we believe it is an attractive one as confirmed by the fairness opinion of (accounting firm) Punongbayan & Araullo, and because we are confident that with the support of a strong investor such as TH Lee, the company’s prospects will continue to be bright," said SPI chairman Alfredo Ayala.

SPI president and chief executive officer Ernest Cu added that the company expects to capitalize on TH Lee’s expertise and focus in the BPO sector to further enhance its leading position in the global market.

SPI manufactures and exports computer database, offering services such as analyzing client’s information utilization needs, converting information from source document to into computer readable form, and processing data to meet client’s specifications. It is the first Philippine company to venture into database manufacture solely for export.

"We look forward to the next phase of moving towards our ultimate goal of being management’s partner in taking SPI to the next level," said Ramanan Raghavendran, managing director of TH Lee.

SPI currently has nine sales and customer support offices in the US and Europe, and nine dedicated production facilities and nearly 4,000 staff members in the Philippines, China, India and Vietnam.

SPI will have a total of 312.2 million shares outstanding after the conversion of the convertible bond held by the AIG group and its affiliates.

TH Lee’s acquisition of SPI, however, excludes the latter’s majority holding in eTelecare International, the Philippines’ largest call center firm.

SPI had spun off eTelecare via a property dividend payable to stockholders of record in SPI as of Aug 22, 2003. eTelecare plans to apply for a listing by introduction on the PSE in the second quarter this year.