Contact Center Review
Review, an initiative by Novistra Capital, is a curated newsletter to keep you updated about the Contact Center industry. In our final edition of the year, we bring you insights & trends, along with select M&A transactions for the 2022 calendar year.
The Contact Center & BPO industry continued its path to recovery following COVID-19, as business volumes witnessed a strong uptick across sectors, including retail, travel, e-commerce and supply chain. Organizations have increasingly utilized outsourced services to minimize labor costs and bolster decentralized workforces. Contact centers continued to invest in cloud, artificial intelligence (AI), machine learning (ML) and automation (RPA) to improve service offerings, manage costs and accelerate growth. The ability to improve customer and employee experiences through digital transformation, whilst creating efficiency and cost savings, will be a key metric of success for contact centers.
AI and ML are helping contact centers automate routine tasks, from answering common customer queries, extracting relevant data, and routing queries to the right agent. A recent report by Replicant estimates AI to increase contact center productivity by 35%. In addition, Gartner projects that by 2026, the global end-user spending on conversational AI will reach $2.9 billion and such deployments will reduce agent labor costs by $80 billion.
The contact center industry experienced healthy M&A activity in 2022, as surplus buyer capital was directed towards synergistic acquisitions in the mid- market segment. Strategic and PE-backed acquirers targeted technology-enabled contact centers and BPO services to strengthen their customer experience solutions for clients across end markets. In December 2022, Novistra successfully advised InsideOut, a sales optimization company, on its sale to Harte Hanks (NASDAQ: HHS). We expect digital transformation to drive deal volumes in this sector in 2023.
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About Novistra
Novistra Capital is a boutique M&A and PE advisory group with a strong focus on the Contact Center Industry. Founded in 2010, Novistra has a team of experienced professionals, located across three offices in the US, UK and India. Please contact the following members of the Novistra team to discuss strategic options for your company.
Ripun Jai Mehta
Managing Partner
ripun.mehta@novistra.com
(646) 645 1935
Pankaj Arora
Managing Director
pankaj.arora@novistra.com
(917) 460 0659
Peter X. Li
Managing Director
peter.li@novistra.com
(917) 250 8605
Anuj Jaisinghani
Vice President
anuj.jaisinghani@novistra.com
(437) 234 1151
Select M&A Transactions in 2022
Select M&A Deals in the Contact Center industry
Global customer experience company, Harte Hanks (NASDAQ: HHS) completed the acquisition of InsideOut, a US-based marketing solutions firm. Headquartered in St. Petersburg, Florida, InsideOut offers inbound and outbound sales outsourcing and experimentation services for partners globally, and since its inception in 2015, the company has partnered with leading Fortune 500 companies including Google, IBM, T-Mobile and Honeywell.
With the acquisition of InsideOut’s inside sales capabilities, Harte Hanks is uniquely positioned to help customers drive growth by optimizing sales and marketing demand generation programs, including data analytics, customer care, fulfillment and logistics services. The acquisition will have 136 employees join the Harte Hanks team and will increase their presence in North America to seven offices. Novistra Capital acted as the exclusive sell-side advisor to InsideOut on its sale to Harte Hanks.
Alta Resources, a leading provider of customer-management and BPO solutions, completed the acquisition of BRM, a Colombia based full service BPO solutions provider. Founded in 2005 in Bogota, Columbia, BRM provides customer experience solutions and digital marketing services to the South American market. Financial details of the transaction were not disclosed. This strategic acquisition will enable Alta Resources to expand its footprint to South America and increase their workforce to 8,000+ associates. Following the acquisition, BRM’s senior leadership, including its founders, Juan Pablo Serrano and Pilar Jaramillo, will remain with the company and provide continuity of leadership and continued success.
Helpware, a Kentucky-based global digital customer experience, content control and verification, and AI services provider, has completed a majority recapitalization with EIR Partners, a Miami-based private equity firm. Helpware combines robust cultural engagement with modern platform support to build innovative digital solutions for blue-chip enterprises in the fintech, ecommerce and retail, gaming and entertainment, on demand services, social media, and healthcare verticals. The company has a global presence with over 2,500 employees across 14 locations and eight countries to support its global clientele. This partnership will allow Helpware to build a global digital services powerhouse with continued expansion of offerings.
Bain Capital, a global value-added investor, acquired VXI Global Solutions from The Carlyle Group. VXI Global Solutions is a leading provider of innovative call center services, delivering omnichannel and multilingual CX and care, custom software development, sales support, and compliance & fraud protection support. VXI has over 35,000 employees across 42 locations in Europe, North America and the Caribbean region and plays a crucial role in partnering with multinational businesses around the world. Financial details of the transaction were not disclosed. This deal is not the first time these two firms have worked together; Bain Capital previously invested in VXI from 2012 to 2016 to further VXI’s penetration in the Chinese and Central American markets. The current acquisition will benefit these firms significantly, and the BPO market.
The US Contact Center Industry outperformed in 2022
Public Comparable Company Analysis –US Contact Center Industry
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