Telus unit expands footprint to India

US$250M deal adds stake in U.S. IT firm

Telus International announced an acquisition that will expand its footprint to India for the first time, a move that’s expected to bump up revenue for its parent wireline division.

The business process outsourcing unit said Monday it will acquire a 65-per-cent interest in California-based Xavient, an IT consulting and software services company with 1,800 employees in the U.S. and India, with the option to buy the rest by Dec. 31, 2020. The total value of the deal is about US$250 million.

This marks Telus International’s second major acquisition in the past few months. In August, it purchased Ireland-based Voxpro, a customer, tech and sales support company with 2,700 employees in the U.S., Ireland, Romania and the Philippines. It did not disclose the value of the Voxpro transaction. The new companies join the current 28,000 Telus International employees around the world.

Vancouver-based Telus, Canada’s third-largest telecommunications company, owns a 65-per-cent interest in its international arm. It sold a 35-per-cent stake to Baring Private Equity Asia for approximately $600 million in 2016. At the time, Telus’ CEO indicated the cash was needed to build its fibre network in Canada.

While multiple analysts say the recent deals aren’t overly material to Telus — it reports nearly $13 billion in revenue annually — they expect the acquisitions will mean a small boost to wireline revenue. That’s a good sign for a division plagued by slower growth as consumers cut the cord across the entire telecom industry.

Telus doesn’t break out the financial metrics for Telus International or its healthcare division, so analysts can’t measure exactly how much of an impact they have on the parent company’s bottom line. But the company reports both divisions