ClientLogic Acquires Service Zone

The New Year brings a new acquisition for ClientLogic: Last weekend it purchased all the outstanding shares of privately held Service Zone Holdings. As ClientLogic, a business process outsourcer in the contact center and fulfillment industry, is also privately held, the terms of the deal were not made public. The deal was announced yesterday, and brings a total of 4,200 agents under the ClientLogic roof, with 1,200 agents in the Philippines and 3,000 in the United States. The acquisition expands ClientLogic's total agent-employee base to more than 16,000 in 39 call centers worldwide. "It's a very savvy move," says Katrina Howell, an analyst at Frost & Sullivan. "Twelve hundred seats in the Philippines are very significant. And, the fact that it's a wholly owned ClientLogic operation offshore is good for ClientLogic, as it ensures processes and quality are consistent across all locations." The news marks the first acquisition in two years for the company. During that time ClientLogic had been steadily growing, with 2002 revenues approaching nearly $400 million. Why Service Zone? The call center outsourcing company fills several gaps for ClientLogic, says Amit Shankardass, solution planning officer at ClientLogic. First, Service Zone generates a significant portion of its revenue in the United States, which complements ClientLogic's existing network of U.S., Canadian, Mexican, European, and Indian centers. Second, Service Zone has a strong Philippine presence, which provides ClientLogic another low-cost customer-service option for clients. Last, Service Zone competes heavily in the financial services market, particularly in the insurance market, an area where ClientLogic has not competed very strongly, according to Shankardass. Shankardass estimates that prior to the deal financial services represented only 5 percent of ClientLogic's overall revenue: "With the acquisition our revenue generated from financial services will grow substantially," he says. Service Zone's entire call center staff will immediately become ClientLogic employees, Shankardass says. He adds that the management staff will stay in place and the leadership team will remain for the time being. Although ClientLogic could not name names, customers include a large global original-equipment manufacturer with 2,200 seats in North America and the Philippines for inbound sales support and customer service and technical support, and a financial services company with more than 350 seats for credit card processing and customer service. "From our perspective this is a very exciting time in the industry," Shankardass says. "The outsourcing initiative has really picked up in the last year or so, where we've seen a lot of first-time customers. A lot more people are talking about offshore and right-shore strategies, so we're looking at some significant growth opportunities." The news comes just four months after David Garner joined ClientLogic as president and CEO (in September 2003). Garner brought to ClientLogic 14 years of leadership experience at Sykes, where he was actively involved from the inception through international growth of call center services at Sykes. Garner also assisted Sykes through a successful IPO in 1996.