William Blair & Company acted as STARTEK’s financial advisor and Jenner & Block LLP acted as STARTEK’s legal counsel. Shearman & Sterling LLP acted as legal counsel for CSP.
StarTek, Inc. (NYSE: SRT) (STARTEK), a provider of business process outsourcing services, has entered into a definitive agreement with an affiliate of Capital Square Partners (CSP) for a strategic transaction involving CSP portfolio company, ESM Holdings Limited (Aegis), a leading global business service provider of customer experience management.
Under the terms of the agreement, STARTEK will issue CSP 20.6 million shares of its common stock in exchange for all the outstanding common stock of Aegis. Concurrently, CSP or an affiliate will further increase its investment in STARTEK by purchasing 833,333 primary shares of STARTEK common stock at closing at $12 per share, representing a $10 million investment2. STARTEK common stock closed at a price of $10.53 per share on March 14, 2018.
Post transaction, CSP is expected to own approximately 55% of the combined company, and STARTEK shareholders are expected to own approximately 45% of the combined company. CSP will also have the right to appoint a majority of the combined company’s board of directors.
Aegis generated approximately $388 million of revenue with $38 million in adjusted EBITDA (a non-GAAP measure) in 20173. STARTEK generated approximately $293 million of revenue, a $1.3 million net loss and $13 million in adjusted EBITDA in 20174. Following the closing of the transaction, the top three customers of the combined company will represent less than 30% of total revenue, compared to 53% for STARTEK in 2017. The combined capital structure is expected to include approximately $180 million of debt.
Capital Square Partners is a principal investment firm specializing in buyouts. The company, led by Sanjay Chakrabarty, Mukesh Sharda,
Bharat Rao, Aparup Sengupta and Sudip Bannerjee, seeks to invest in TMT, health care, consumer and business services.
Shearman & Sterling advised Capital Square Partners with a team including Stephen Besen (Picture), Sidharth Bhasin, Grace Jamgochian, Gina Seong and Richard Ou.
Involved fees earner: Stephen Besen – Shearman & Sterling; Sidharth Bhasin – Shearman & Sterling; Grace Jamgochian – Shearman & Sterling; Gina Seong – Shearman & Sterling; Richard Ou – Shearman & Sterling;
Law Firms: Shearman & Sterling;
Clients: Capital Square Partners;