An Eye on M&A Potential Amongst Outsourcing Providers

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There is increased chatter around potential M&A activity as Service Providers look for new ways to grow. Read more on this research at: https://portal.isg-one.com/briefs/Pages/Is%20The%20Outsourcing%20Industry%20Ripe%20For%20MA%20Activity.aspx

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An Eye on M&A Potential Amongst Outsourcing Providers

  1. 1. © 2013 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase® 1 Impact of Expected Consolidation Why all this talk of Mergers and Acquisitions? We are hearing increased chatter around potential M&A activity as Service Providers look for new ways to grow. We’ve Seen It Before  If history holds, 30 – 40% of the current Top- 20 providers may exit the market. 50% Five of the Top-10 Chinese domestic providers we identified just two years ago are no longer active in the market in their prior form.
  2. 2. © 2013 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase® 2 Why Acquire ?  Respond to potential U.S. visa reform  Look to kick-start BPO growth, particularly for specific capability plays  Manage risk through reducing the dependency on flagship clients, particularly in Financial Services and Healthcare Examining the Characteristic of Potential M&A Candidates ISG has a unique perspective, informed by our data and market activity, on what might make a service provider a potential target for M&A activity. Who are the Acquisition Candidates ? 2 Years Prior to Acquisition Year of Acquisition We have spotted historical evidence of a correlation between negative New Scope bookings growth, and the likelihood of a firm being taken off the market. New Logo Bookings of Acquired Providers
  3. 3. www.isg-one.com Information Services Group is a leading technology insights, market intelligence and advisory services company, serving more than 500 clients around the world to help them achieve operational excellence. ISG supports private and public sector organizations to transform and optimize their operational environments through research, benchmarking, consulting and managed services, with a focus on information technology, business process transformation, program management services and enterprise resource planning. Clients look to ISG for unique insights and innovative solutions for leveraging technology, the deepest data source in the industry, and more than five decades of experience of global leadership in information and advisory services. Based in Stamford, Conn., the company has more than 800 employees and operates in 21 countries. knowledge powering results®

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