eTelecare Global Solutions, Inc. (ETEL-NASDAQ) priced its initial public offering of 5,500,000 American Depositary Shares at a price of $13.50 per ADS, within the $12.50 to $14.50 price range. Each ADS represents the right to receive two of eTelecare’s common shares. All of the shares being offered are being sold by eTelecare itself. Morgan Stanley acted as sole book-running manager for the offering, with Deutsche Bank, Robert W. Baird, and JMP Securities acting as co-managers.
The company refers to as "Business Process Outsourcing" which is really an OUTSOURCED CALL CENTER operator. eTelecare provides call centers for operations such as technical support, financial advisory services, warranty support, customer service, sales, customer retention and marketing surveys and research. It operates from four delivery centers in the Philippines and seven delivery centers in the United States, with approximately 6,800 employees in the Philippines and approximately 3,000 employees in the United States as of December 31, 2006. It even lists its largest clients: American Express Company, AOL, Cingular Wireless, Dell, Intuit, Sprint Nextel Corporation and Vonage Holdings together representing approximately 91% in terms of revenue for 2006.
eTelecare was profitable in 2006: revenue was $195.1 million, operating margin was 9.9% and net income was $12.2 million. For 2005, net revenue was $152.2 million, operating margin was 2.7%, and net loss was $1.8 million.
Here is our full description from the initial filing. If you think about the description, this brings an interesting question. Which IPO is more ironic? An outsourced call center IPO coming public in the United States for US investors to own, or private equity becoming a publicly traded entity? The good news is that at least US call center workers can buy a stock that is a pure hedge against their own job.
Jon C. Ogg
March 28, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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