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Call Center Market Report

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Customer Contact Market Report
HIGHLIGHTS

Outsourcing still provides meaningful cost savings, representing roughly 20% of the total market with approximately 2.0 million outsourced agents located primarily in India and the Philippines.

Technology developments, vendor pruning, and consumer demand push providers to expand their product, service, and channel offerings.20

M&A activity expected to increase steadily in 2017 as corporate profits and consumer spending increases.

FCC onshoring initiatives continue to create jobs within big industry players via organic growth and acquisitions.19

Steady growth opportunities on a go-forward basis as the global customer contact management market is expected to grow to $81 billion by 2018 representing a CAGR of 6.1%.

U.S. based healthcare legislative changes and requirements will increase costs and complexity of compliance.
2015 YEAR IN REVIEW

Advancing technology and differentiation boost growth rates

2015 was an exciting year for the Customer Contact Management (CCM) industry, with huge strides in technology, automation, differentiation, and omni-channel diversification. Customers want to use the channel that most quickly solves their problems, including voice, chat, text, and social media. Corporate services expanded their technology offerings making large technological advances, as witnessed with Amazon's new Alexa -- a virtual assistant that can answer a wide variety of questions from weather to traffic. These technological advances around automation create a surge of efficiency and growth opportunities for CCM businesses. According to International Customer Management Institute (ICMI), nearly 55% of customers want an automated self-service experience, increasing efficiency and decreasing costs for businesses. In addition, 80% of companies plan to use customer service as a way to differentiate themselves from their competition.4

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Call Center Market Report

  1. 1. C A L L C E N T E R MARKET REPORT THIRD QUARTER 2016
  2. 2. 2 CUSTOMER CONTACT MANAGEMENT Signs of Growth for Call Centers? HIGHLIGHTS • Outsourcing still provides meaningful cost savings, representing roughly 20% of the total market with approximately 2.0 million outsourced agents located primarily in India and the Philippines. • Technology developments, vendor pruning, and consumer demand push providers to expand their product, service, and channel offerings.20 • M&A activity expected to increase steadily in 2017 as corporate profits and consumer spending increases. • FCC onshoring initiatives continue to create jobs within big industry players via organic growth and acquisitions.19 • Steady growth opportunities on a go-forward basis as the global customer contact management market is expected to grow to $81 billion by 2018 representing a CAGR of 6.1%. • U.S. based healthcare legislative changes and requirements will increase costs and complexity of compliance. 2015 YEAR IN REVIEW Advancing technology and differentiation boost growth rates 2015 was an exciting year for the Customer Contact Management (CCM) industry, with huge strides in technology, automation, differentiation, and omni-channel diversification. Customers want to use the channel that most quickly solves their problems, including voice, chat, text, and social media. Corporate services expanded their technology offerings making large technological advances, as witnessed with Amazon's new Alexa -- a virtual assistant that can answer a wide variety of questions from weather to traffic. These technological advances around automation create a surge of efficiency and growth opportunities for CCM businesses. According to International Customer Management Institute (ICMI), nearly 55% of customers want an automated self-service experience, increasing efficiency and decreasing costs for businesses. In addition, 80% of companies plan to use customer service as a way to differentiate themselves from their competition.4
  3. 3. 3 Source: IBISWorld OD4878, June 1015 Please push '0' to speak with a customer service representative 2015 SERVICES SEGMENTATION Global and U.S. CCM Spend CURRENT INDUSTRY PERFORMANCE 7.9% CONVERGYS CORPORATION USMARKETSHARE2015 6.7% TELETECH HOLDINGS INC. USMARKETSHARE2015 4.7% SYKES ENTERPRISE INC. USMARKETSHARE2015 Over the past 20+ years, the customer experience has remained largely the same and the CCM market has seen steady contraction and consolidation. However, the recent rise of internet technology has revolutionized call centers customer service providing a breath of life into CCM systems creating “omni-channel” product offerings and services. Omni-channel usage includes websites (85%), call-center (75%), email (65%), live chat (58%), Facebook, and Twitter.5 Today, customers rarely use one communication channel when reaching out to customer support. According to an article by TeleTech, 57% of inbound calls to the contact center coming from customers who first attempted to resolve an issue on the companies website, while 30% of callers are still on the company's website when they speak to an associate.6 The CCM sector has seen significant vendor consolidation and as a result, larger CCM providers have pushed towards more diversified market offerings, including call centers, automated interactions, and online interaction services.20 This diversification has improved customer service offerings dramatically as employee agents continue to work with clients to help build relationships. This customer-centric model generates significant value in leveraging relationships and ability to scale. The global market is estimated to grow to $64 billion, of which approximately $35 billion (~56%) of call center revenue is domiciled in the United States. Expected growth rate for the industry as a whole is 4-5% per year.1
  4. 4. 4 The CCM sector will grow and expand with steadily increasing M&A activity to (i) consolidate, diversify and enhance capabilities to secure larger, multisite contracts, and keep pace with technological advancements; (ii) operate at the optimum threshold between the cost savings of outsourcing and the customer satisfaction ratings of onshoring; (iii) move up the value chain and encompass a multitude of business models and services; and, (iv) focus on margin enhancement and profitability to compete as non-revenue products continue to be outsourced and larger companies realize economy of scale cost savings.20 The CCM sector abounds with transformation and opportunities as large industry players grow and consolidate the market. Currently, the top four industry players are Convergys (7.9%), TeleTech(6.7%),Sykes(4.7%),andAlorica(4.5%)withacombined market share of 23.8% in 2015. According to International Data Corporation (IDC), current global CCM revenues are expected to grow from ~$64 billion to $81 billion by 2018 with a four-year CAGR of 6.1%.1 The majority (80%) of all call center agents are still located in-house, with an expected growth rate of 2.9%. However, outsourced agent positions are expected to grow at 5.1% as companies realize the cost saving benefits.1 In the past, the CCM industry has suffered as a result of automation and offshoring with recent growth spurred from government intervention. In 2011, the FCC announced a goal of creating 100,000 call center jobs in the US and the industry is still feeling the effects of that legislation today. The jobs were generally created by larger industry players, as a way to increase customer satisfaction compounded with technological opportunity. Now, onshoring is a maturing business model with agents taking customer service calls and web chats during specific times in their homes.19 However, it is uncertain how much longer this will last with the upcoming election.1 According to IBIS, the industry's contribution to the overall economy is expected to grow at an average annual rate of 1.2% -- slightly lower that the projected US GDP growth of 2.5% over the same period. When the average annual industry growth rate is below that of the overall economy this indicates that the industry is in the mature phase of its life cycle.1 KEY INDUSTRY DRIVERS CUSTOMER CONTACT MANAGEMENT INDUSTRY WITH M&A OPPORTUNITIES HOMESHORING • Cheap tech and freelance staff supplying their own tech reduces home-based call center costs • Residual effects of 2011 FCC U.S. job creation via “virtual call centers” 5 CONSUMER SPENDING • Consumer spending continues to strengthen with economy • Consumer spending means business will invest in call centers to increase sales and gain market share 1 PRIVATE INVESTMENT IN TECHNOLOGY • High sensitivity to technological innovation • Recent technological innovation may mitigate cost disadvantages for US operators 1 CORPORATE PROFIT • CCM is sensitive to changes in corporate profit • Increases in corporate profit results in increases in CCM • Profit is expected to rise in 2015 and 2016 1 NUMBER OF BUSINESSES • New businesses are more likely to outsource CCM • Business growth increases demand for CCM services • Outlook is positive for new business creation 1 OFFSHORING • Offshoring reduces labor costs and resulted in industry contraction • Lowers labor costs result in lower prices to clients • Outsourcing remained steady in 2015 1
  5. 5. U.S. MARKET 5 YEAR PERFORMANCE 2011-2016 2015 CUSTOMER MANAGEMENT SPEND BY VERTICAL (%) (TOTAL MARKET = ~$63B) Source: NelsonHall, June 2015; Convergys Strategic Positioning Report 'Other' Includes: Retail, healthcare, manufacturing, government, utilities, transportation Source: Convergys Strategic Positioning Report 2012 Source: Convergys Strategic 2012 Positioning Report IBISWorld OD4878 Services North America Services Multi-Shore Services Home Agent Services Technology Global Infrastructure Technology-Based Services Analytics Experience Analytics Consulting Services 38% 15% 6% 41% C O M M U N I C A T I O N S F I N A N C I A L S E R V I C E S T E C H N O L O G Y O T H E R $31 $39 2 0 1 1 2 0 1 6 4.6% ASPECTS OF CUSTOMER MANAGEMENT 5 Customer service touches all sectors but is most developed in the communication sector, which includes telecom, cable and media. Other industries with sizeable exposure are the financial sector, technology, retail and healthcare. Call centers are seeking to grow capacities by moving up the value chain with technical support, sales, collections and analytics service offerings. The industry continues to grow at a moderate pace. In the last five years, the CCM industry has recorded an annualized growth rate at an estimate of 1.1% and industry revenue at ~$8.9 billion. The signs of growth indicates renewed life and vigor for the call center markets.1 THE VALUE CHAIN?
  6. 6. U.S. REVENUE BY SEGMENT Sykes Enterprise, Inc. (SYKE ) Convergys Corporation (CVG) TeleTech (TTEC) Source: Company Reports, 2015 SEC Filings 10k 'Other' Includes: Retail, manufacturing, government, utilities UNIQUE RISK OBSERVATIONS FROM INDUSTRY LEADERS 6 Healthcare Legislature Healthcare businesses are subject to many regulatory requirements and changes in current regulations, which can significantly increase the cost of doing business. A substantial portion of operating costs consist of labor costs, changes in governmental regulations relating to wages, healthcare and healthcare reform - all of which could have a material adverse effect on the business.7 Macroeconomic Trends To mitigate the impact of any negative economic and product cycles on growth rates, the industry continues to seek ways to diversify into verticals andservicelinesthathavecountercyclicalfeatures and healthy growth rates.8 The majority of revenue in 2015 was received from customers operating in the global communications industry. At times, the industry has experienced significant fluctuations in growth rates and capital investment, and predicting future performance in this industry is challenging.7 Digital Media Evolution Unfavorable regulation and negative public perceptionaboutdigitalmarketingcouldadversely affect the business and results of operations. With the continued growth of the online marketplace, there is increasing awareness and concern among the general public, privacy advocates, mainstream media, and government bodies regarding the reach of digital marketing and its potential impact on individual privacy interests.9 THE TOP PLAYERS: A BREAKDOWN 38% Communications 23% Financial Services 20% Technology/Consumer 7% Transportation & Leisure 5% Healthcare 7% Other 58% Communications 9% Financial Services 10% Technology/Consumer 22% Other 35% Communications 20% Financial Services 6% Technology/Consumer 14% Transportation & Leisure 11% Healthcare 14% Other
  7. 7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       VALUATION METRICS: PUBLICLY TRADED CUSTOMER CONTACT MANAGEMENT COMPANIES (AS OF AUGUST 8, 2016; FIGURES IN USD MILLIONS) OPERATING METRICS: PUBLICLY TRADED CUSTOMER CONTACT MANAGEMENT COMPANIES (AS OF AUGUST 8, 2016; FIGURES IN USD MILLIONS) PROFITABILITY Values in millions of USD, except per share data ratios. Values converted at spot rate on 08/12/2016 Source: Capital IQ 08/12/2016 7 Industry profitability has been variable due to a confluence of technological change, relocation of operations, government assistance and the increasing number of remote workers.1 Industry margins are driven by several factors: (1) offshore vs. onshore work; (2) size and scale of projects; (3) productivity & training; and (4) vendor consolidation. • Margins improve as the industry migrates offshore because it reduce client's costs with lower labor inputs, and favoring provider margins. • Margins typically follow the scale of projects and companies, e.g. the larger the project the better the margins. Larger companies and projects with increased scope of work are able to improve operating leverage with additional revenues and efficiencies. • Training and productivity of workers boosts efficiency and reduces turnover through experience, technology, and more advanced management systems. • Larger players in the industry are benefitting from vendor consolidation at the expense of smaller players because of recent market volatility and the desire to simplify cost Source: S&P Capital IQ; 2015 Company Reports
  8. 8. AnnouncedAnnouncedAnnouncedAnnounced DateDateDateDate TargetTargetTargetTarget AcquirerAcquirerAcquirerAcquirer Deal SizeDeal SizeDeal SizeDeal Size Target LTMTarget LTMTarget LTMTarget LTM RevenueRevenueRevenueRevenue Target LTMTarget LTMTarget LTMTarget LTM EBITDAEBITDAEBITDAEBITDA EV/RevenuesEV/RevenuesEV/RevenuesEV/Revenues EV/EBITDAEV/EBITDAEV/EBITDAEV/EBITDA 07/06/2016 buw Holding GmbH Convergys Corporation      06/10/2016 Allus Global BPO Center S.A. Grupo Konectanet S.L.      12/21/2015 Comdata S.p.A. The Carlyle Group LP      11/26/2015 Webhelp SAS KKR & Co. L.P.      10/14/2015 Fulfillment Technologies, LLC Singapore Post Enterprise Private Limited      09/30/2015 Gemma Communications LP DealNet Capital Corp.      09/01/2015 BPO Management Sp. z o.o. Arteria S.A.      07/10/2015 Sitel Worldwide Corporation Groupe Acticall SAS      07/06/2015 Contact Center sp. z o.o. Arteria S.A.      06/30/2015 MsourcE (India) Pvt. Ltd. Hinduja Global Solutions Limited      06/10/2015 ETS Group Limited Million Top Enterprises Limited      03/10/2015 H1 Communication AB Panoster Investment AB      02/03/2015 avocis AG Capita plc      01/07/2015 West At Home, LLC Alorica Inc.      01/07/2015 West Direct II, Inc. Alorica Inc.      12/03/2014 Volt Delta Resources, LLC NewNet Communication Technologies      09/21/2014 Contact Centres Australia Pty Ltd Telekomunikasi Indonesia International      High      Low      Median      Mean      8 Source: S&P Capital IQ CUSTOMER CARE M&A TRANSACTIONS (LAST 24 MONTHS) (AS OF AUGUST 8, 2016; FIGURES IN USD MILLIONS) Source: S&P Capital IQ 2016; Company Reports According to data provided by S&P Capital IQ, there were more than 40 M&A transactions completed in 2015 for 'Outsourced Client Support and Customer Services' and 'Telemarketing and Telephone Soliciting Services'. This represents a slight increase from the 38 M&A deals completed in 2014. The average transaction size of $147 million was skewed by a few largedeals,includingGroupeActicallSAS$830millionacquisition of Sitel Worldwide Corp; KKR's $679 million acquisition of Webhelp SAS; and The Carlyle Group's $262 million acquisition of Comdata S.p.A. However, the median transaction size was a more modest $25 million. EV/EBITDA Valuation multiples reflected the volatility of the market with ranges from 4x to 19x, and an average of 4-7x. Lookingahead, clientscontinuetofocusonvendorconsolidation to manage their outsourcing relationships. This should drive more M&A activity as vendors seek to improve their competitive position, diversify product offerings, and improve profitability. MERGERS & ACQUISITIONS
  9. 9. 9 ACTIVE BUYERS LARGEST M&A CCM TRANSACTIONS 2014-2016 Source: S&P Capital IQ 2016 • In 2015, Acticall acquired 100 percent of Sitel Worldwide from Onex Corporation. 10 , 11 • Groupe Acticall is highly respected for its business growth and innovation, with over 7,500 employees and over 65 million customer contacts managed annually. 10 , 11 • Sitel is advancing its position as a world leader in outsourced customer care innovation with a global platform and client base and will benefit significantly from Acticall's capital structure and digital vision. 10 , 11 "With a leading international footprint, a blue chip customer base, a very talented management team and great technology, Sitel is already a world leader." - Laurent Uberti, CEO of Groupe Acticall • In 2015, the Webhelp management team will now become controlling shareholders, alongside KKR, while Charterhouse Capital Partners will step back. 12 , 13 • During Charterhouse ownership, Webhelp improved revenues from $200 million to a forecast $725 million in 2015, the number of contact centres has increased from 12 to more than 80 while the number of employees globally has risen from 7,000 to in excess of 30,000. 12 , 13 • Webhelp specializes in comprehensive customer experience management services across a range of digital, social, mobile and traditional voice channels to an international client base. 12 , 13 “We believe that Webhelp's commitment, ability to execute and proven track record of success, coupled with the experience, enthusiasm and resources that will be contributed by KKR, will enable us to become a world leading independent business process outsourcer”. - Frederic Jousset, Co-Founder of Webhelp • In 2015, The Carlyle Group acquired a majority participation in Comdata. 14 • Comdata, the leading Italian company for outsourcing of contact center, help desk, back office, credit management and document management services. 14 • Comdata Group’s Executive Chairman Enrico Saraval, said: “Comdata aspires to become a relevant European player. structure and digital vision." 14 “We are delighted to welcome Comdata to our European portfolio. Comdata’s strong business model offers further potential for international growth. Using Carlyle’s extensive international network, we hope to assist Mr Canturi and his team in accelerating their growth plan.” -Marco De Benedetti, MD Carlyle Europe Partners RANK TARGET BUYER SIZE (USDM) 1 Sitel Worldwide Grupo Acticall SAS 830 2 Webhelp SAS KKR & Co. 680 3 Comdata S.p.A The Carlyle Group 262
  10. 10. 10 RANK TARGET BUYER SIZE (USDM) 4 Avocis Capita plc 241 5 Allus Global BPO Center Grupo Konectanet 192 6 buw Holding GmbH Convergys Corporation 133 • In 2015, avocis has a strong position in the German speaking regions of Europe serving similar sectors to Capita’s UK-based customer management business, with high quality, long term clients particularly in telecoms and utilities. 15 • Acquisitions, alongside generating profitable organic growth, are a key part of Capita’s business model to both build its capabilities and increase its market reach and penetration across a growing number of sectors. 15 "The acquisition of avocis provides us with immediate scale and further capabilities in this territory. avocis has a strong position in the German speaking regions of Europe with long term and growing relationships with quality private sector clients." - Andy Parker, CEO of Capita • Konecta plans to strengthen their strategic position in the Latin American Market. 16 • They completed two important acquisitions in the Region: including, 49% of B-Connect, Mexican Market leader contact centre with >4,000 employees, and 100% of Allus Global BPO Centre, Latin American Leader with more than 22,000 employees.16 • These acquisitions allow Konecta to play a major role in BPO industry and strengthen their position in Iberia and Latin America becoming the top 3 BPO services providers in Peru and Argentina, with a prominent position in Chile, Mexico and Brazil. 16 "Konecta acquires Latin American Allust Global BP. These operations allow Konecta to play a major role in the BPO industry in Latin America." - José María Pacheco, President of Konecta • By adding buw’s geographic footprint, complementary client base, and German language capabilities, Convergys expects the acquisition to expand its presence in the growing EUR 3 billion German outsourced customer management services industry. 18 • buw is a growing and profitable business which generates approximately EUR 150 million annual revenue, providing end- to-end business process outsourcing (BPO) services to leading companies across a wide breadth of industries. 18 "This accretive transaction will increase our capacity to serve the customer management BPO market in Germany, further diversify our marquee client base, and strengthen our relationships with the multinational clients we share.” -Andrea Ayers, Convergys President and CEO LARGEST M&A CCM TRANSACTIONS 2014-2016 ACTIVE BUYERS Source: S&P Capital IQ 2016
  11. 11. 11 The CCM sector experienced significant transformation over the last few years. Government policies have spurred larger volumes of the domestic business and higher customer quality services by onshoring call centers, but congruently created issues by increasing costs through legislative complexity. Despite government intervention, M&A volumes have steadily increased from both strategic and financial sponsors, and are expected to continue to grow via acquisition of technology enabled service and SaaS providers (cite BAIRD). The Customer Contact Center will continue to evolve from a cost center to a superior customer experience creator, providing customers the omni-channel offerings they expect.6 The key industry players have identified a multitude of issues on the horizon, but specifically there are concerns about healthcare legislation, macroeconomic trends, and the digital media evolution. Legislation increases costs, profitability is directly influenced by macroeconomic cycles, and digital media is critical to industry marketing. The global CCM sector will grow at 4.5% per year driven by consolidation from larger players to diversify and enhance capabilities, and secure larger, multisite contracts.1 As a result, the CCM industry will move up the value chain and encompass a multitude of business models and services. Technology, Consolidation, and Diversification Create a Superior Customer Contact Center CONCLUSION
  12. 12. 12 ENDNOTES 1 Blau, Gavan. Customer Care Centers in the US Market Research. Rep. no. OD4878. IBISWorld, 01 June 2015. Web. 12 Aug. 2016. 2 Tuchman, Kenneth. "TeleTech Summary Q3 2015." SUMMARY Q3 2015 (2015): n. pag. TeleTech. TeleTech, 1 Oct. 2015. Web. 12 Aug. 2016. 3 https://www.capitaliq.com 4 Weborg, Rich. "Year in Review: Customer Service Trends in 2015 and What They Mean for 2016." Year in Review: Customer Service Trends in 2015 and What They Mean for 2016. ICMI, 05 Jan. 2016. Web. 12 Aug. 2016. 5 "Call Centers." Encyclopedia of Emerging Industries. Farmington Hills, MI: Gale, 2016. Business Insights: Global. Web. 2 Aug. 2016. 6 Sirohi, Niren, and Jim Dickey. "The Omnichannel Evolution of the Contact Center." TeleTech. Consulting Services, 1 Oct. 2014. Web. 12 Aug. 2016. 7 Convergys 2015 10k. 8 Sykes 2015 10k. 9 Teletech 2015 10k. 10 http://www.sitel.com/news/groupe-acticall-completes-acquisition-of-sitel-worldwide/#sthash.fNNefjCl.dpuf 11 http://www.businesswire.com/news/home/20150710005574/en/Groupe-Acticall-Announces-Agreed-Acquire-Sitel-Largest 12 http://www.webhelp.com/en-us/news-insights/news/webhelp-partners-with-kkr/ 13 http://www.reuters.com/article/kkr-webhelp-idUSFWN13L08S20151127 14 https://www.carlyle.com/news-room/news-release-archive/carlyle-group-acquires-majority-shareholding-comdata-leading-italian- 15 http://www.capita.com/news/news/2015/european-contact-centre-specialists-avocis-to-be-acquired-by-capita.aspx 16 http://www.grupokonecta.com/en/espanol-konecta-compra-al-gigante-latinoamericano-allus-global/ 17 http://www.grupokonecta.com/wp-content/uploads/2016/06/Konecta-crece-con-la-compra-de-la-empresa-mexicana-B-Connect_ABC- Sevilla-07.06.2016.pdf 18 http://www.businesswire.com/news/home/20160706006368/en/Convergys-Acquire-buw 19 Wissink, Jeff. "Why Onshoring Your Call Center Make Sense." Driving Business Success with Technology. Baseline, 07 Mar. 2012. Web. 23 Aug. 2016. 20 BAIRD. "Business Process Outsourcing." Transformation of Business Process Outsourcing (2015): n. pag. RWBAIRD. RWBAIRD, 01 Mar. 2015. Web. 23 Aug. 2016.
  13. 13. 13 WE ACTED AS SOLE ADVISOR TO THE BUYER H A S A C Q U I R E D T H E P U B L I C H E A LT H O P I N I O N A N D S O C I A L S C I E N C E S D I V I S I O N O F INDUSTRY EXPERIENCE W E A C T E D A S F I N A N C I A L A D V I S O R T O T H E B U Y E R H A S A C Q U I R E D A S U B S I D I A R Y O F W E A C T E D A S F I N A N C I A L A D V I S O R H A S R E C E I V E D A S T R AT E G I C I N V E S T M E N T F R O M A S U B S I D I A R Y O F K B R A A n a l y t i c s W E A C T E D A S F I N A N C I A L A D V I S O R T O T H E B U Y E R H A S A C Q U I R E D WE ACTED AS SOLE ADVISOR TO THE SELLER H A S B E E N A C Q U I R E D B Y One Equity Partners Headwaters' transaction in the Call Center Industry was awarded DEAL OF THE YEAR “Headwaters ran an exhaustive search for us and uncovered a variety of interesting operating assets. Their global network of relationships allowed us access to the senior leadership of WPP, a global communications powerhouse. Their deal savvy and market knowledge made this international transaction a reality.” - Marco Villarreal, Qualfon’s CFO Call Center Consolidation Qualfon acquired Center Partners, a United States contact center outsourcing company that over the last 17 years has built an excellent reputation for high performance sales programs for its clients in communications, financial, technology, and retail industries. Center Partners has six contact centers across Idaho, Washington and Colorado with approximately 2,500 employees who will be added to Qualfon's 10,000 employees and 11 contact centers, primarily in near-shore and off-shore locations.
  14. 14. 14 Disclosure: This newsletter is a periodic compilation of certain economic and corporate information, as well as completed and announced merger and acquisition activity. Information contained in this newsletter should not be construed as a recommendation to sell or buy any security. Any reference to or omission of any reference to any company in this newsletter should not be construed as a recommendation to buy, sell or take any other action with respect to any security of any such company. We are not soliciting any action with respect to any security or company based on this newsletter. The newsletter is published solely for the general information of clients and friends of Headwaters MB, LLC. It does not take into account the particular investment objectives, financial situation or needs of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for all investors. This newsletter is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Prediction of future events is inherently subject to both known and unknown risks and other factors that may cause actual results to vary materially. We are under no obligation to update the information contained in this newslet- ter. Opinions expressed are our present opinions only and are subject to change without notice. Additional information is available upon request. The companies mentioned in this newsletter may be clients of Headwaters MB, LLC. The decisions to include any company in this newsletter is unrelated in all respects to any service that Headwaters MB, LLC may provide to such company. This newsletter may not be copied or reproduced in any form, or redistributed without the prior written consent of Headwaters MB, LLC. The information contained herein should not be construed as legal advice. About Headwaters MB: Headwaters MB is an independent, middle market investment banking firm providing strategic merger and acquisition advice, capital raising and special situations advisory. Named “Investment Bank of the Year” by major industry organizations in 2014 and 2015, Headwaters MB is headquartered in Denver, CO, with six regional offices across the United States and partnerships with 18 firms covering 30 countries. For more information, visit www.headwatersmb.com. To learn more about how the Headwaters MB team can help you grow from opportunities in the Call Center Sector, please contact: Bob Balaban | Managing Director 720.792.9400 bbalaban@headwatersmb.com • 25 years of investment banking and operating experience. • Served as the lead banker on over 75 transactions primarily in the business services marketplace. Chad Gardiner | Vice President 720.310.0403 cgardiner@headwatersmb.com • 14 years of experience in investment banking and capital markets. • Advised on over $6 billion in aggregate transaction value working in investment banking Call Center Coverage Team

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