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posted on May 01, 2014 by Gary Bragar
GP Strategies is focused on global expansion. Its non-U.S. business accounted for 22% of global revenues in Q1 2014. Continued global deployment at its soon-to-be largest client HSBC will add to international growth this year. In Q1 2014 deployment of services to HSBC commenced in the U.S., Canada, U.K. and Hong Kong. Additional geographies to be deployed in 2014 include smaller operations in countries in Asia Pacific, Latin America and the UAE. In Q1 2014 GP Strategies generated $7.3m revenue from HSBC and upon full deployment, expected by end of 2014, the annual revenue run rate is expected to be mid $30ms, with an anticipated minimum of $30m achievable by end of 2014.
GP Strategies is also supporting some of its U.S. headquartered clients in their global expansion. One example is Cigna Healthcare, which has been a Learning BPO client for six years. Cigna began its contract in the U.S. and expanded to countries including Korea, China and the Philippines. As for future global expansion, prospects include an existing $10m p.a. revenue U.S. client that is considering expansion into Canada and Europe.
In the past six months GP Strategies has established 14 new legal entities in countries in EMEA, Asia and Latin America. Its latest legal entity was established in April in the Philippines. In particular, GP Strategies is seeking to grow in Asia Pacific. Upon GP Strategies acquisition of Blessing White in October 2012, in 2013 the company began selling leadership training into its client-base, delivered via Blessing White.
It appears that GP Strategies is now moving on from the phase of driving international expansion by inorganic growth. CEO Scott Greenberg recently stated further acquisition activity has been put on the back burner for a while while it focuses on deployment of new clients.
Consistent with NelsonHall’s research findings, clients are looking for vendors with global learning capability for reasons that include cost reduction, compliance, increased efficiency and consistency.
Expect GP Strategies to achieve organic revenue growth in Q2 2014 between 12% and the low teens.