Large BPO and KPO companies have been on the acquisition trail, primarily to build an onshore marketing presence. However, over the last two years, companies have been moving towards a global service delivery model via acquisitions in order to expand not just their client reach but also delivery capabilities and overcome cross-cultural barriers.
The acquisitions made by Aegis, Capita and BancTec in Q2 2009 (Apr-Jun) are examples of this trend. Aegis acquired UCMS Group for $40.7 m to add Australia as a global delivery center. Capita acquired the three delivery centers of Capmark Services Europe to serve its European customers. BancTec expanded its delivery center in the Nordic region of Europe to offer a wider portfolio of services. These deals not only helped increase the companies’ geographic spread, but also expanded their client base and service offerings. The exhibit below compares acquisitions over the last two quarters.
Apr-Jun 2009 (Q2)
Jan-Mar 2009 (Q1)
Number of
deals
7
15
Average
deal value
$28.6 m
$82.1 m
Largest
deals
·Aegis acquired UCMS Group for $40.7
m. UCMS specializes in contact centers and customer relations services. With
this acquisition, Aegis will expand its services and global delivery centers
to include Australia.
·Capita acquired Capmark's European
financial services units for GBP10 m. Capmark provides services to
securitizations, commercial mortgages, commercial property loans and asset
managers. Capita will expand its financial services administration operations
in the European market.
·TriNet acquired Gevity for $98 m.
Gevity is an HRO service provider with 675 employees.
·ACS acquired e-Services Group for
$85m. e-Services specializes in BPO services. ACS will retain 4,000 employees
of the e-Services Group based in Jamaica
and St. Lucia.
In the midst of the economic slowdown, there has been a considerable drop in the number of M&A deals recorded - from 15 in Q1 2009 (Jan-Mar) to 7 in Q2 2009 (Apr-Jun). The number of deals recorded in the finance and accounting segment fell by 50% compared to Q1 2009; CRM deals fell by 75%; while there were no deals in the KPO segment.
Companies are acquiring to build presence not only in the US but also in UK, Europe and Asia. For instance, Genpact acquired back office services delivery center of GE Money in Guatemala, ACS acquired e-Services Group in Caribbean. In Q1, US accounted for 58% of the acquisitions and this has fallen to 14% in Q2. On the other hand, UK, Europe and Asia combined accounted for 28% of the acquisitions in Q1 2009 and this grew to 72% in Q2 2009.
The above information has been taken from the ValueNotes Outsourcing Dealtracker (BPO & KPO) . For more details, please write to us at
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
or call us at +91 20 6623 1717 / 1793
