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BPO Big Boys Will Blend
ClientLogic and SITEL enter a merger agreement to form a massive organization spanning six continents; one analyst says the global footprint is "essential in today's space."
Posted Oct 13, 2006
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There will be a new giant in the BPO market in about 90 days, if ClientLogic and SITEL get their way. The two organizations today announced they had entered into a definitive merger agreement, with a newly formed subsidiary of ClientLogic buying all outstanding common stock of SITEL, subject to regulatory clearance and the approval of SITEL's shareholders. The combined entity will continue to be known as ClientLogic, and will have revenue of more than $1.7 billion. Some 65,000 employees at more than 145 facilities in 28 countries will generate that revenue, making the new ClientLogic one of the largest and most far-reaching BPO providers in the world. "This merger will greatly increase the breadth and depth of our offering, both geographically and metrically, and allow us to diversify across multiple segments," says David Garner, president and CEO of ClientLogic. "Our mission will be to deliver the BPO industry's highest quality services, while providing our clients with the strategic insight, scale, and diversity of offerings to guarantee success." Garner, who will become CEO of the new ClientLogic should the deal close successfully, predicts that the combined entity will be able to deliver its joint offering within 30 days of a successful close. "We've looked at this possibility for a long time, have lots of buy-in from SITEL executives, and tons of enthusiasm on both sides of the merger." ClientLogic's expertise in customer care and back-office BPO, married to SITEL's customer support services and contact model design, are complementary and would make a compelling draw. "The companies are similar in many dimensions, and this combined entity will provide a wealth of options to customers worldwide," says Amit Shankardass, senior vice president of global marketing for ClientLogic. "Both companies are leaders in the same space and have become familiar with one another's operations over the years," says Stephen Loynd, program manager with IDC. While these factors will only help the combination process, though, he doubts the claim of 30 days post-merger combined offering. "It will probably take a bit of time, as with any two organizations of significant size."
Still, there is no ignoring the shakeup this will cause in the BPO market. "This is an important development," Loynd says. "ClientLogic was already one of the revenue leaders in BPO, along with companies like Convergys and EDS, so the increased global reach will only make them more comprehensive. That's essential in today's space." Related articles: The Hype Surrounding BPO How to Choose an Outsourcing Partner The Hidden Costs of Outsourcing
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