PricewaterhouseCoopers (PwC) has sold its international business process outsourcing (BPO) operations to Exult, a company that provides human resources (HR) services, for $US17 million in cash.
Exult, based in California, said the deal would allow the company to offer a wider breadth of services and expand its global footprint.
"I'm very excited about the total capability and geographic presence that Exult now has," president and chief operating officer of Exult, Kevin Campbell, said.
Exult will add to its HR BPO offerings with more accounts receivable, general ledger and finance, accounts processing, and fixed assets and procurement tools including e-procurement, founder, chairman and chief executive officer of Exult, said Jim Madden, said. Exult will also expand its accounts payable offerings.
Further intellectual property and capabilities acquired by Exult included BPO tools, message procedures and domain names such as BPO.com, Madden said.
In an effort to make the transition smooth for its former clients, PwC will be transferring 500 of its employees to Exult including the client managers of transferred existing accounts. This group includes multilingual professionals with cross border finance and accounting skills and years of BPO experience.
The deal boosts the number of Exult's blue chip clients to 15. The company will take on six of PwC's contracts with time left ranging from two to six years. These include Standard Chartered Bank, Uk companies Equifax and Safeway, Tibbet & Britten, Grupo Algar, and a major unnamed airline.
The total scheduled revenue from the remaining terms of these contracts was about $US100 million, Exult said.
This acquisition expands Exult's global footprint to Hong Kong, Singapore, the Netherlands, Poland, India and Brazil.
"Our target market has increased dramatically," Madden said. "We believe we can now target and support multinational companies in North America, Europe, Latin America, and Asia."
As a result of the deal Exult now employed about 2000 people worldwide with more than half of them outside North America, and served more than 500,000 employees of clients, Madden said.
It will also add two client service centers, one in South Shields, England, and another in Uberlandia, Brazil. It already has centers in Memphis, Tennessee, Houston, Charlotte, North Carolina, and Glasgow, Scotland, and has opened new centers in Toronto, Canada, and Mumbai. PwC also sold off its management consultancy business last year to IBM Corp. for $US3.5 billion.The deal was finalised in October.
According to a study by Gartner, the worldwide BPO market will increase 10.5 per cent in 2003 to $US122 billion from $US110 billion in 2002. Gartner said that this moderate growth in 2002 and 2003 - compared to double-digit growth in several years before them - was a result of delays in contract signings and lower negotiated rates for BPO.
North America is forecast to make up 57 per cent or $US69 billion of the worldwide BPO market this year, with Western Europe forecast to grow 10.9 percent to $US27 billion. The Asia-Pacific BPO market is expected to grow 7.8 per cent in 2003, to $US8.7 billion. However, Gartner expects growth in Western Europe and Asia/Pacific to overtake growth in the North American BPO market over the next few years.