IQor, a customer service outsourcing provider, agreed on Tuesday to buy Jabil Circuit’s aftermarket services business for $725 million to help round out its offerings.
Under the terms of the deal, iQor will pay $675 million in cash and $50 million in preferred shares that pay an 8 percent annual dividend. After the deal closes, the business will continue to provide support for its former parent.
The transaction â€" the biggest ever by iQor â€" is meant to combine the company’s own customer-support capabilities and the Jabil business’s services for electronics makers, retailers and services.
Behind the deal is the idea that clients can use the company to fill all their customer service needs, like help calls and aftermarket repairs.
“We have many of the pieces on the board now that we need to have,†Gary Crittenden, the chairman of both iQor and the company’s lead investor, the private equity firm HGGC, said in a statement. “We’ve added a full end-to-end solution in customer care.â€
Mr. Crittenden added that his firm, which bought a majority stake in iQor three years ago, would most likely hang on to the company for several more years while it continues to grow.
The Jabil business is extremely familiar for its soon-to-be owner, whose chief executive, Hartmut Liebel, led the aftermarket unit for more than 10 years.
IQor was advised by Morgan Stanley, Credit Suisse and General Electric‘s GE Capital Markets. Jabil was advised by JPMorgan Chase and the law firm Holland & Knight.
This post has been revised to reflect the following correction:
Correction: December 17, 2013
A previous version of this post misspelled the surname of the chief executive of iQor, a customer service outsourcing provider. It is Hartmut Liebel, not Hartmut Liebl.
