Furthermore , BPO organizations are shifting away from only providing contact center services to offering other back-office functions including financial , accounting , and IT services , making them more attractive to buyers .
This rationale for consolidation has created ever-larger industry participants offering an ever-broader range of services - and enabling clients to streamline back-office functions - through a single provider .
MAI ’ s acquisition of WASI ( March 2023 ), a privately held contact center operator based in Nebraska , is an example of a company looking to add value with new services capabilities . With the acquisition , MAI now has more than 200 employees , including contact center agents in all 50 U . S . states and in Costa Rica .
... BPO ORGANIZATIONS ARE SHIFTING AWAY FROM ONLY PROVIDING CONTACT CENTER SERVICES TO OFFERING ... FINANCIAL , ACCOUNTING , AND IT SERVICES , MAKING THEM MORE ATTRACTIVE TO BUYERS .
6 . Location ( s ). “ Location , location , location ” is a wellknown phrase in real estate . But it also holds value in other industries , particularly in the BPO contact center sector given that geographic expansion enables companies to enter new markets . Which , in return , opens them up to new customer bases .
Categorized into three geographic concentrations - onshore , nearshore , and offshore - the BPO contact center landscape has experienced a recent resurgence in the demand for nearshore and offshore providers .
Rising labor costs and attrition of domestic agents have widened the cost differential between domestic and international solutions . This shifting landscape has led companies to look at new geographic options to optimize cost-efficiency and talent availability .
Concentrix , a leading provider of customer experience services and technologies , acquired Webhelp , a recognized leader in the market , in March 2023 .
Webhelp ’ s network of contact centers adds over 25 new countries to the combined company , with a diversified revenue contribution and footprint across more than 70 countries . The new partnership brings a set of anticipated benefits including a diversified customer base , value-added digital capabilities , and additional support located throughout three continents .
Similarly , the rationale for Konecta ’ s merger with Comdata in April 2022 was to expand the geographic footprint of the two combined companies . Konecta had historically been strong in most of the world ’ s Spanish-speaking areas – the Iberian Peninsula , northern Africa and Latin America .
By contrast , Comdata was renowned for its coverage of mainland Europe , especially Italy and France . The combination of Konecta and Comdata created the sixth largest company in the BPO sector with close to 2 billion euros ($ 2.1 billion ) in annual revenues .
Of more consequence , the merger created a company that can offer services in 30 different languages utilizing a global footprint that provides “ best-shoring ” to a customer base of more than 500 large corporates .
By 2029 , China and India are expected to generate considerable revenue share and boost regional market growth . The report cited improved infrastructure , increasing government spending on BPO , BPO-centric education , and an emphasis on employees ’ communication skills .
These two established geographies , along with newer markets such as South Africa and the Caribbean , are likely to be the focus of much acquisition interest in the coming years .
VALUATIONS Historical public company valuation multiples in the contact center services subsector have held relatively steady at elevated levels , driven by favorable industry tailwinds and a buoyant capital markets environment .
However , multiples have come under pressure in recent quarters owing to major concerns by investors regarding the negative impact that AI will have on this people-centric industry vertical . The median EBITDA ( earnings before interest , taxes , depreciation , and amortization ) multiple was 6.8x in Q3 2023 , representing a 10.3 % decrease from Q2 2023 .
This transaction is an example of two larger industry participants combining to expand their overall geographic coverage . The merged company has established one of the most robust , well-balanced global footprints in the industry , enhancing Concentrix ’ s presence in Europe and Latin America , and establishing its African footprint , all at scale .
38 CONTACT CENTER PIPELINE