Despite a visible impact of economic slowdown on the BPO industry in terms of slower hiring, lay-offs, etc., some companies continue to be on an expansion drive. Infosys recently announced its expansion plans in Australia. Wipro has announced aggressive hiring plans.
Amongst all these, Aegis BPO is one of the BPOs that have grown multifold as a result of the acquisitions. The company plans to cross the $500 m mark by 2010. The acquisitions by Aegis demonstrate divergence across segments and geographies with a singular focus on growth. The exhibit below provides a list of companies acquired by Aegis over the last couple of years.
Year
Company
Name
Location
of the acquired company
Rationale
for acquisition
2009
Nucleus (CCN)
South
Africa
Entered the African market
2009
UCMS Group
Australia
Expanded in the Australia
and the New Zealand
markets
2008
PeopleSupport
US
Added of new clients (15 new clients);
delivery centers in Philippines
and Costa Rica;
entered into new verticals (travel and transportation sector)
2008
AOL Call Centre
India
Aegis bagged a contract with AOL
2007
Teletech Services
India
Strengthened its presence in the domestic
market, addition of Bharti-Airtel in its clientele
2007
Global Vantedge
US
Forayed into newer segments (credit and
receivable management BPO)
2007
Stesalit Infotech
India
Added new service offerings (medical
transcription)
2007
Technion
US
Added a new onshore delivery center
2005
Orion Dialog, Customer First
India
The buyouts added 12 languages and a large
presence in the domestic BPO market
Nov 2003
Aegis
US
Added a capacity of 5,100 seats, added
customer care, telemarketing and help desk services to blue-chip companies in
the telecom and financial services sectors
2003
eTelequest, a 400-seater call centre company
US
Added an onshore location
Source: ValueNotes Research
The recent acquisitions of Aegis demonstrate a focus on creating an image of a global service provider with geographically dispersed delivery centers and not remain an ‘offshore service provider’.
Going forward, we expect to see most of the well-funded large BPOs to continue an expansion spree. In lean times when clients are evaluating and re-evaluating their outsourcing plans, it makes sense for these BPOs to recruit and acquire overseas:
Makes financial sense – in terms of low valuations
Helps dilute (if not drown) the anti-outsourcing sentiment which rides its peak in the downturn
Gives the client benefit of proximity thus increase confidence
While integration is a major issue with overseas acquisitions, currently BPOs seem to be in a mood to weigh the pros rather than worry about the cons.
