MANILA/HONG KONG (UPDATE) - Philippine Long Distance Telephone Co said it will sell a majority stake in its business process outsourcing unit to private equity firm CVC Capital Partners Ltd - a deal that underlines rising interest in the Philippines as an investment destination.
Terms of the PLDT deal were not disclosed, but a source familiar with the matter said last month that PLDT was in exclusive talks with CVC for a deal valued at about $320 million including debt.
The deal is also the second that CVC has closed in Southeast Asia in less than a month, after leading a consortium to acquire Malaysia's two main KFC fast food franchises for $1.7 billion.
Private equity firms have been beefing up their capabilities in Southeast Asia's rapidly growing economies and the unit had also attracted interest from other buyout firms including Bain Capital and Carlyle Group.
London-based CVC has a strong track record of landing deals in Southeast Asia. In 2011, it bought 15 percent of the Philippines' Rizal Commercial Banking Corp for $115 million and in 2000, it acquired industrial packaging maker Steniel Manufacturing Corp.
CVC is also looking to exit its PT Matahari Department Store asset in Indonesia, one of the most widely anticipated deals in that country this year, which could fetch as much as $3.5 billion through an M&A sale.
STRONG PHILIPPINES GROWTH
PLDT, the Philippines' second-most valuable listed firm, said it would sell an 80 stake in SPi Global Holdings, a diversified business process outsourcing firm with global operations, and keep the remaining holding.
The deal is expected to be completed next month. PLDT said it continually reviews its strategy and portfolio and the sale represented an opportunity to realise attractive returns for shareholders.
The Philippines' economy grew 6.6 percent in 2012, the second-fastest pace so far in Asia after China, outpacing government and market estimates. The benchmark Philippine stock index is up nearly 11 percent this year after surging by a third to become one of Asia's best performing markets last year.
UBS was PLDT's exclusive financial adviser for the sale of SPi Global. SPi has more than 18,000 employees and operations in the United States, Europe, the Philippines, India, Vietnam and Australia.