Divestiture Further Strengthens Balance Sheet, Allows Startek to Focus on Growing Core Business
Startek, Inc., a global customer experience (CX) solutions provider, announced that ESM Holdings Limited, an indirect wholly-owned subsidiary of the Company, has entered into a definitive share purchase agreement with Arabian Internet and Communications Services Company (Solutions) to divest its stake in Contact Center Company (CCC) to Solutions. The agreement is subject to customary closing conditions, third-party consents and regulatory approvals, including consents required under the Startek secured revolving credit facility and senior term loan facility agreement.
Established in 2011 as a joint venture between Startek and Saudi Telecom Company (STC), CCC has gained significant momentum to become a premier provider of CX solutions to enterprises in the Kingdom of Saudi Arabia (KSA). Startek is proud of the lineage CCC has created in KSA with many notable accomplishments over the years. Recently, Frost & Sullivan recognized CCC as 2022 Saudi Arabia Company of the Year Award and Market Leadership Award in the Contact Center Services industry.
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“The journey with CCC has been highly successful and I am grateful to all the associates who have made this possible. I am confident of their continued success under the ownership of Solutions”
Startek owns 51 percent ownership interest in CCC with the remaining 49 percent ownership interest held by STC. Pursuant to a share purchase agreement with Solutions, Startek and STC will divest their respective ownership interest in CCC at an enterprise value of SAR450 million, subject to debt-like and working capital adjustments. At prevailing exchange rates, this values the Startek stake at U.S. $61.2 million subject to closing adjustments and capital gains taxes. It is anticipated that Startek will utilize the net proceeds from the transaction to pay down amounts outstanding under its secured revolving credit facility and senior term loan facility agreement.
Startek constantly evaluates its capital allocation strategy and reviews its business portfolio. Given the many growth opportunities available to Startek, the company is divesting its stake in CCC to focus on its core business activities.
“The journey with CCC has been highly successful and I am grateful to all the associates who have made this possible. I am confident of their continued success under the ownership of Solutions,” said Bharat Rao, CEO, Startek. “The divestment of CCC will support the Startek business as we deleverage the balance sheet and prioritize growing our core business.”
The transaction is expected to be completed during the second quarter of 2023.
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