Creates a Global BPO Services Company Approaching $1 Billion in
Projected Revenue in 2010 and Approximately 30,000 Combined
Employees BOSTON and MANILA, Philippines, Aug. 14
/PRNewswire-FirstCall/ -- Stream Global Services, Inc., (AMEX:OOO),
and EGS Corp., the indirect parent company of eTelecare Global
Solutions, Inc., jointly announced today that they have entered
into a definitive agreement to combine in a stock-for-stock
exchange. As a result, the current Stream and EGS Corp.
stockholders will own approximately 57.5% and 42.5%, respectively,
of the combined entity. The Board of Directors and principal
stockholders of both Stream and EGS Corp. have unanimously approved
the combination. They include Ares Management LLC and certain
founding Stream stockholders representing 90.2% of the Stream's
outstanding shares as of the date of the signing of the Share
Exchange Agreement, as well as EGS Corp.'s owners LiveIt
Investments Ltd., a wholly owned subsidiary of Ayala Corporation,
and Providence Equity Partners LLC, who together own 100% of EGS
Corp. The combined company, which will retain the Stream Global
Services name, will have approximately 30,000 employees located
throughout 50 solution centers in North America, Europe, the
Philippines, Latin America, India, the Middle East and Africa. The
combination creates a global business process outsourcing (BPO)
company with a diversified Fortune 1000 customer base, a very
experienced executive team, a comprehensive BPO services portfolio,
and complementary businesses with technical and product leadership
across a wide range of industries, including the technology,
retail, entertainment, media telecommunications and financial
service sectors. The combined company will draw upon the broad
range of service strengths of each business's integrated service
offerings that range from sales and revenue generation to customer
care and technical support, as well as warranty services. It is
estimated that the combined enterprise would have annual revenues
approaching $1 billion for the year ending December 31, 2010. Scott
Murray will continue to be the Chairman and Chief Executive Officer
of the company following the close of the combination. Alfredo I.
Ayala, eTelecare's Chairman, will become the Non-Executive Vice
Chairman of the Board of Directors of Stream Global Services and
will remain the Non-Executive Chairman of the company's Philippine
entity. Of the ten members on the new Board of Directors, Ares will
appoint three directors and one independent director, and Ayala and
Providence will together also appoint three directors and one
independent director. The remaining two directors will be Mr.
Murray and a third independent director, who will also be the
Chairman of the Audit Committee. Stream's corporate headquarters
will continue to be in the Boston area in Wellesley, MA following
the closing. Ares, Ayala (through its wholly owned company LiveIt)
and Providence Equity will own approximately 45.5%, 25.5% and 17.0%
respectively, of the combined company. Stream's Chairman and Chief
Executive Officer, Scott Murray, will own approximately 5% of the
combined company. "This combination brings together two great
businesses that are extremely complementary," said Stream's
Chairman and Chief Executive Officer, Scott Murray. "Since its
inception, the vision for Stream Global Services has been to be a
highly differentiated BPO provider that offers our clients services
designed to promote and build their brands and customer loyalty,
while maintaining an efficient cost model. This combination enables
us to fulfill our vision by leveraging eTelecare's strength in the
Philippines, where it is a market leader and has approximately
10,000 employees and its depth in service offerings and client
diversity." Mr. Murray went on to say; "I am particularly pleased
to have the opportunity to work closely with Ares, Providence
Equity and Ayala as strategic and long-term investors to help our
management team build a multi-billion dollar revenue company in the
future that offers an integrated BPO service strategy on a global
basis." John Harris, President and Chief Executive Officer of
eTelecare said, "This is a very exciting time in the evolution of
eTelecare to be able to deliver a truly global service offering for
our clients. This combination fulfills our strategic vision of
extending our delivery capability throughout Europe, Asia and Latin
America. The eTelecare team is extremely excited about joining
Stream to create a leading global BPO company." Mr. Ayala, Chairman
of eTelecare and CEO of LiveIt, Ayala Corp.'s BPO holding company,
said, "Ayala Corporation believes that this combination creates a
global BPO company that is one of the preeminent service providers
in the industry and uniquely positioned to deliver a full range of
market leading solutions to our clients. The combination also
underscores our belief that the Philippines is playing an
increasingly critical role in the outsourcing strategies of global
clients, due to its many advantages. We look forward to working
with Scott and his team to create value over the long-term for our
clients, employees and stockholders." As a result of this
combination, Stream Global Services expects to: -- Generate
projected revenues approaching $1 billion for the year ending
December 31, 2010. The combined company will also have a strong
balance sheet to allow it to make future investments in
technologies, new service offerings for its clients and new
geographic locations such as China, Brazil and Japan. -- Be a top
tier global BPO provider by extending its presence to 50 global
solution centers with operations in North America, Europe, the
Philippines, India, Latin America, Middle East and Africa. --
Broaden its services offerings to include a full portfolio of sales
and revenue generation, warranty management, customer loyalty and
brand management, customer care, technical support as well as
customer life cycle management. -- Expand and diversify its blue
chip client base across multiple vertical markets. -- Extend the
company's reach into new industry segments such as financial
services, retail and consumer products. In addition, the
combination will significantly expand our market share in the
technology, telecommunications and broadband industries. --
Maintain strong financial sponsorship from Ares Management LLC,
Providence Equity Partners LLC and Ayala Corporation - institutions
that collectively manage over $50 billion in investments. --
Leverage the combined company's investment in technology in order
to provide the highest level of business performance and enhance
operating efficiencies in the business. -- Create a strong platform
for future growth in geographies, service offerings and market
segments. The company will continue to be one of the premier
providers of sales and revenue generation, customer care, technical
support and warranty service offerings in the industry. -- Be led
by a very experienced group of management executives with a proven
track record of creating value for clients, employees and
stockholders. -- Create significant new and exciting career
advancement and opportunities for our employees around the world.
Upon the closing of the combination, in accordance with the terms
of Stream's existing Series A and Series B Preferred Stock held by
Ares, the Series A and Series B Preferred Stock will be converted
on closing into approximately 35 million Common shares, including
the issuance of approximately 9 million Common shares that become
due from acceleration of future dividends over the remaining term
of the Preferred Stock. The 7.5 million of Stream's existing
warrants currently held by Ares, with a strike price of $6.00 per
warrant and exercisable until 2018, will be exchanged on closing
for 1.0 million Common shares. All of the Common Stock held by
Ares, including shares issued in connection with the Preferred
Stock conversion, dividend acceleration and warrant exchange, are
included in the 57.5% ownership in the combined company to be held
by the predecessor Stream stockholders immediately following the
closing of the combination. Following the closing of the
combination, Stream will have approximately 80 million Common
shares outstanding and all Preferred Stock will have been converted
to Common shares. The stockholders agreement, which will be
effective upon closing, grants Ares, Providence Equity and Ayala
pre-emptive rights to acquire 50 million shares of Stream's Common
Stock at $6 per share that become exercisable on to the extent that
any of our publicly traded warrants (NYSE/AMEX:OOO.WS) are
exercised for $6 per warrant into Common shares. The pre-emptive
rights expire when Stream's public warrants are no longer
exercisable after October 17, 2011. The number of pre-emptive
rights decline ratably as the number of public warrants outstanding
decline. Stream has approximately 20.1 million public warrants
outstanding as of July 31, 2009. The transaction is subject to
customary closing conditions, including the submission of an
information statement with the Securities & Exchange Commission
and normal regulatory approvals including clearance under the
Hart-Scott-Rodino Antitrust Improvements Act. As the requisite
majority of stockholders of each company have approved the issuance
of shares in the combination of Stream with EGS Corp., the
combination will not require further approvals of any other
stockholders of either Stream or EGS Corp. The transaction is
expected to close in September 2009. Stone Key Partners LLC served
as financial advisor to Stream. Stream's legal advisor in the
transaction was Wilmer Hale LLP and Proskauer Rose LLP served as
legal advisor to Ares. EGS's financial advisor was Morgan Stanley
& Co., Incorporated and its legal advisor was Weil, Gotshal
& Manges LLP. Contact Information: Stream Global Services, Inc.
Karen Falcone Vice President of Marketing 781-304-1800 eTelecare
Global Solutions, Inc. Mark Skoog Director of Marketing
480-707-5414 About Stream Global Services: Stream Global Services
is a premium provider of customer care and business process
outsourcing (BPO) services for the brand-driven Fortune 1000. A
global firm, with more than 16,000 employees based out of 35
service centers in 20 countries, Stream is a trusted advisor to
some of the largest technology, retail, entertainment/media,
telecommunications and related companies in the world. Its service
programs, including technical support, sales services, customer
retention and revenue generation, are delivered through very
disciplined processes used by a highly skilled workforce. Stream
continues to expand its global presence and service offerings to
increase brand loyalty, revenue and business performance for
organizations across the globe. To learn more about the company and
its complete service offerings, please visit
http://www.stream.com/. About eTelecare: eTelecare Global Solutions
is a leading provider of business process outsourcing (BPO)
services focusing on the complex, voice and non-voice based segment
of customer care services. The company provides a range of
services, including technical support, customer service, sales,
customer retention, chat and email from both onshore and offshore
locations. Services are provided from delivery centers in the
Philippines, United States, Nicaragua, and South Africa. Additional
information is available at http://www.etelecare.com/. About Ayala
Corporation: Ayala was founded in 1834 and is the holding company
of one of the largest and most diversified business groups in the
Philippines, with interests in real estate, financial services,
telecommunications, electronics, and information technology. LiveIt
Investments is its holding company in the BPO sector, with
significant holdings in eTelecare, Integreon and Affinity Express.
Additional information is available at http://www.ayala.com.ph/.
About Ares Management: Ares Management is an SEC-registered
investment adviser and alternative asset manager with total
committed capital under management of approximately $29 billion as
of June 2009. With complementary pools of capital in private
equity, private debt and capital markets, Ares Management has the
ability to invest across all levels of a company's capital
structure - from senior debt to common equity - in a variety of
industries in a growing number of international markets. The Ares
Private Equity Group has a proven track record of partnering with
high quality, middle-market companies and creating value with its
flexible capital such as Stream Global Services, Inc. Other notable
current investments include General Nutrition Centers, Inc., Hanger
Orthopedic Group, Inc. and Maidenform Brands, Inc.. The firm is
headquartered in Los Angeles with approximately 250 employees and
professionals located across the United States and Europe. For more
information, visit the Ares website at http://www.aresmgmt.com/.
About Providence: Providence Equity Partners is the leading global
private equity firm specializing in equity investments in media,
entertainment, communications and information companies around the
world. The principals of Providence manage funds with approximately
$22 billion in equity commitments and have invested in more than
100 companies operating in over 20 countries since the firm's
inception in 1989. Significant investments include Aditya Birla
Telecom, Bresnan Broadband Holdings, Casema, Com Hem, Digiturk,
Education Management Corporation, eircom, Freedom Communications,
Hulu, Idea Cellular, Kabel Deutschland, Metro-Goldwyn-Mayer,
NexTag, Ono, Open Solutions, PanAmSat, ProSiebenSat.1, Recoletos,
TDC, Univision, VoiceStream Wireless, Warner Music Group, Western
Wireless and Yankees Entertainment and Sports Network. Providence
is headquartered in Providence, RI (USA) and has offices in New
York, Los Angeles, London, Hong Kong and New Delhi. Additional
information is available at http://www.provequity.com/. Safe
Harbor. This press release contains forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, including forward-looking statements
regarding our business expectations and objectives. These
statements are neither promises nor guarantees, but involve risks
and uncertainties that could cause actual results to differ
materially from those set forth in the forward-looking statements,
including, without limitation, risks relating to our ability to
maintain and win additional client business, continue to maintain
our operating performance and margin expansion, continue to have
sufficient capital to grow and maintain our business, retain our
management team and effectively operate a global franchise across
multiple jurisdictions plus other risks detailed in our filings
with the SEC, including those discussed in the Company's quarterly
report filed with the SEC on Form 10-Q for the quarter ended June
30, 2009. DATASOURCE: Stream Global Services, Inc. CONTACT: Karen
Falcone, Vice President of Marketing of Stream Global Services,
Inc., +1-781-304-1800, ; or Mark Skoog, Director of Marketing of
eTelecare Global Solutions, Inc., +1-480-707-5414, Web Site:
http://www.stream.com/ http://www.etelecare.com/
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