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.
