DEBUG: PAGE=domain, TITLE=NelsonHall Blog,ID=1469,TEMPLATE=blog
toggle expanded view
  • NelsonHall Blog

    We publish lots of information and analyst insights on our blogs. Here you can find the aggregated posts across all NelsonHall program blogs and much more.

  • Events & Webinars

    Keep up to date regarding some of the many upcoming events that NelsonHall participates in and also runs.

    Take the opportunity to join/attend in order to meet and discover live what makes NelsonHall a leading analyst firm in the industry.


Subscribe to blogs & alerts:

manage email alerts using the form below, in order to be notified via email whenever we publish new content:

Search research content:

Access our analyst expertise:

Only NelsonHall clients who are logged in have access to our analysts and advisors for their expert advice and opinion.

To find out more about how NelsonHall's analysts and sourcing advisors can assist you with your strategy and engagements, please contact our sales department here.

Sitel’s SYKES deal: Analysis & Market Impact


Sitel’s announcement on 18 June to enter an agreement to acquire all outstanding shares of SYKES stock further consolidates the global CX services leaders. It also highlights the market shift to large-scale, multinational, and financially strong players able to make the needed investments in consulting, CX technology, and automation. Here is a short analysis of the deal.

The largest in a series of CX M&A deals

The all-cash transaction valued at approximately $2.2bn is the largest CX services deal since Concentrix acquired Convergys in 2018, but it follows several major deals in the last 18 months:

  • TELUS International purchase of Lionbridge AI for $935m
  • TELUS International earlier expansion with Competence Call Center for $1bn
  • Teleperformance acquisition of Health Advocate for $690m
  • TTEC acquisition of Avtex for $490m
  • Private equity investment in Everise BPO for $450m.

It also follows several public listings by CX services companies, such as the spin-offs of Concentrix and TELUS International and the IPOs of IBEX and TaskUs.

In addition, several smaller acquisitions in CX consulting, design, marketing, automation, and new geo and consolidations in Australia, Benelux, and Russia point to increased centralization with fewer strategic players – a trend that has been long overdue in CX services where the top 10 brands form less than 30% of the market. The combined Sitel-SYKES company will have ~$4bn revenues in 2021.

As the market moves to more complex and more value-add CX, the requirements for providers increase exponentially. This change limits the pool of eligible CXS experts with robust analytics and an automation tech ecosystem, cloud infrastructure partnerships and experience, and end-to-end talent models and platforms.      

Sitel gains delivery expansion and WAH IP

An established player with a strong footprint in the U.S., Europe, and the Philippines, SYKES offers several capabilities to Sitel.

First is its mature work-at-home (WAH) offering with IP and sizable presence even before 2020, not only in the U.S. but also in selected European markets. In Q1 2021, it had 77% of its European workforce at WAH. SYKES has an established footprint in Germany and the Nordics, adding capacity in these highly sought-after languages. The delivery networks of both companies are mostly complementary, reaching a combined ~155k employees in 39 countries and ~50 languages. Sitel will likely modify some of the newly acquired assets to its hybrid on-site and WAH MAXhub model (for example, in Romania). It has already opened MAXhub in Barranquilla, Colombia, for ~1k people, converted its site in Romainville, France, and is launching one in Athens, Greece.

Foray into healthcare

While Sitel does not comment on client and industry overlap, an industry where SYKES directly brings benefits is U.S. healthcare payer. The healthcare sector is one of the fastest-growing segments for SYKES, for example, expanding 51% organically y/y in Q1 2021. It formed ~6% of SYKES’ $1.7bn revenues in 2020.

Another sizable industry for SYKES is financial services, approximately a third of the business, growing throughout 2020 and 18% y/y in Q1 2021.

Post-transaction, Sitel will have over 600 clients.

Buying specialized capabilities

Similar to the historic acquisition of its WAH expertise, SYKES has been an active acquisitor of specialized capabilities. The last purchase was at the end of 2020, when it added U.S. personal finance digital media company The Penny Hoarder (TPH) for $102.5m.

Other significant additions have been RPA integrator and managed automation firm Symphony Ventures, tuck-in marketing and design agency deals, self-service content developer, and lead generation, inbound sales, and digital marketing company Clearlink. Over the years, SYKES had varying degrees of success in cross-selling and internationalizing these capabilities. With its pedigree in replicating its digital transformation offerings from the French market to the U.S., the opportunity now is for Sitel to unify SYKES solutions with the Sitel EXP+ platform. 

The main standout is Clearlink, with its ML-based model and tools for integrated online and contact center sales and marketing. Another is social media services in content moderation and online brand protection, insights, and proactive customer engagement, a cornerstone of SYKES’ digital transformation approach.

Next for Sitel

At this stage, Sitel cannot disclose specifics around future branding of the acquired logos, leadership changes, or the next steps in the consolidation roadmap. The deal is expected to close in the second half of 2021.

Expect some delivery network rationalization, accelerated integration of SYKES WAH platforms and expertise, and concerted efforts in utilizing its RPA resources.

For the broader CX market, all indications are for other sizable deals in 2021.

No comments yet.

Post a comment to this article: