EGS is a portfolio company managed by One Equity Partners (OEP), a middle-market private equity firm. Post EGS acquisition, Alorica will employ over 91k people in 154 locations across 16 countries in five continents. Lee will be CEO and Chairman of the new organization, based in Irvine, California. He will also be the majority shareholder. The companies expect to complete the transaction by early Q3 2016. The purchase price is not being shared at this time but Alorica plans to release this information over the next few months.
Lee founded Alorica 16 years ago with $10k and a vision. Fast forward to 2015, and Alorica had beome a $1.2bn company with the West Corp. Agent Services acquisition. And with EGS, Alorica will be generating ~$2.3bn in global revenue, behind only Teleperformance and Convergys as a pure play CMS BPO provider. In CMS BPO, scale is critical; clients want fewer partners, for one. By acquiring EGS, Alorica also avoids becoming a consolidation target.
Beyond the increased scale:
Just over a year ago, Alorica doubled in size with the acquisition of West Corporation’s Agent Services. The integration has been smooth, and Alorica claims that it has not lost any of the clients it obtained from West. One of the lessons learned from that acquisition was the importance of not over burdening its operations, HR, technology, and communications teams with integration work. With the EGS acquisition, it will have personnel dedicated to the integration, supported by McKinsey consultants.
Alorica and EGS have a limited delivery overlap. The network IP will be Alorica branded. It took one year to integrate West Corporation’s Agent Services business and the same amount of time is anticipated for the EGS integration.
Client overlap is 10-12 clients, from the communications, retail, and technology sectors. Post-acquisition, Alorica will serve ~600 clients, supporting ~30 languages. It will employ 52k people in North America (including 6k work at home agents), 26.3k in the Philippines, and 11.8k in Latin America.
EGS is Alorica’s second key acquisition in two years. In integrating West, it has learned to manage business integration smoothly, handle significant growth, and retain clients. Far from being a consolidation target, Alorica is becoming a consolidator.
One year on from my chat with Andy Lee, it’s good to see a leader articulate a clear goal and successfully lead a team on the road to making it a reality.
Postcript: This deal was completed on June 30, 2016.
]]>The report also reveals how voice interactions are increasingly being deflected to non-voice channels, primarily webchat, by high tech organizations. Complex interactions tend to remain in the voice channel, though some high tech organizations have moved entirely to a digital, non-voice, customer care and technical support framework. High tech organizations are experiencing reductions in product returns as a result of utilizing video chat and online videos for product installation.
The report identifies the following shifts in channel usage for outsourced CMS in the high tech sector between now and 2020:
The scope of outsourced CMS activity in the high tech sector has moved beyond customer care and retention, technical support, and collections/credit management, with increased emphasis now on revenue generation through paid-for technical support, analyzing end-to-end processes to reduce product returns and truck rolls, and enhanced installation support.
The report shares a variety of case examples quantifying how CMS vendors have delivered the benefits sought by high tech organizations from outsourcing. It also includes details of the current and future shape of CMS in the high tech sector, outsourcing drivers, vendor delivery capabilities, channel usage, market size and growth, and critical success factors.
‘Targeting CMS in High Tech’ is now available, along with a NEAT vendor assessment tool which enables sourcing managers to assess and compare the performance of vendors offering CMS services to high tech organizations. For more information, please contact Guy Saunders at [email protected]. You can also view a brief video with highlights from the report here.
]]>Founded in 1993 and headquartered in Jeffersonville, IN, Accent has 2.3k employees and delivers services from six locations in the U.S. and Jamaica. It has 18 clients in the telecoms, technology, retail, financial services, and consumer products sectors. Current annual revenue run rate is ~$67m, hence the $16m purchase price indicates that it is not a profitable company.
The acquisition is expected to close by the end of May, and STARTEK expects the majority of the integration to be completed by year end 2015. With the addition of Accent, STARTEK will have ~50 clients and ~14k employees operating in five countries.
This is an important acquisition for STARTEK. Not only will it broaden its client base and sector mix, it will reduce its heavy dependence on the telecoms sector, which has accounted for ~80% of total revenues, and where it is exposed to vendor consolidation and reduced contact center volumes in the industry. Just three clients (T-Mobile USA, AT&T and Comcast) account for nearly 60% of global revenues, and in Q1 2015 STARTEK was impacted by a 30% revenue reduction from AT&T. STARTEK has been close to bankruptcy several times in the past four years, and has had to close several of its call centers, most recently in Oklahoma and Costa Rica.
The acquisition will boost global revenues by around 26%, and enhance STARTEK’s omni-channel customer engagement offerings. Accent’s customer engagement agency model will complement and enhance the analytics capabilities gained with the acquisition of Ideal Dialogue in 2013.
STARTEK has clearly been focused on diversifying its client base, having signed $10.5m of new business in Q1 2015 across clients in healthcare, financial services, and consumer products. However, it is the acquisition of Accent that will be the key determinant of STARTEK’s future success as it looks to shake off its dependence on the telecoms sector.
]]>In total, 24 languages are supported, and the center is able to draw upon London’s rich cultural mix to recruit students and recent college graduates with broad language capabilities.
In the government sector, HGS runs a multi-channel helpline for the U.K. Visas & Immigration department, supporting people in 222 countries in 21 languages through voice, e-mail, webchat, and self-service. It provides customer care as well as market insight and reporting for this client.
In the automotive sector, HGS agents utilize video chat in addition to traditional channel support such as voice, e-mail, webchat, and social media, to provide sales and road-side assistance to the European and Middle Eastern divisions of a luxury automotive client. HGS has found that customers consider webchat to be impersonal, and is planning to extend the use of video chat beyond the client’s U.K. customers to Europe over the next year.
The Chiswick center supports several bespoke client programs that go beyond traditional customer care. For example, HGS is conducting on-site product testing as part of complaint handling for a global client in the CPG sector. In a recent instance, HGS tested one of the client’s consumer products (bottled bleach) in order to determine whether the product cap was defective as part of a customer complaint; on this occasion it was able to establish that the product was not defective, though tests on other similar products have necessitated changes to product packaging in the past. HGS is at liberty to recommend product changes, replace damaged items for the client’s customers where warranted, and send the customer complimentary products based on inconvenience caused.
HGS is supporting Danone U.K., a provider of early life nutrition, water, and fresh dairy products, with customer care by providing nutrition and health information to new parents. The care is provided through voice, email, and webchat, with plans to provide video chat support within a year. HGS supports this client through a 30-strong agent team which includes five qualified midwives and nutritionists. It also has a group of agents with experience caring for children, handling complaints, and providing out-of-hours support for the early life nutrition line.
In the healthcare sector, HGS is supporting a healthcare provider, Virgin Health, that offers parents the ability to have their babies’ stem cells collected at birth and stored, preserving them for research and potential treatment of serious illnesses. HGS is involved in the entire process, from initial inquiry to stem cell collection to the final checks which take place six months after the birth of the child. HGS coordinates the work of medical professionals, arranges the distribution of the collection kits to hospitals, and organizes the delivery of collected samples to the storage unit. This program has multi-lingual capabilities as it supports customers in the U.K and the Middle East.
The HGS Chiswick center is a good example of a vendor effectively leveraging the language diversity and high education standards of a location to offer strong multi-language, multi-country, and multi-channel support, and to develop bespoke support programs that add value to the customer relationship.
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