This document summarizes findings from Ephor Group's analysis of the front office BPO market landscape for contact center CRM services. Some key points include: - The overall BPO market is growing in the single digits, with some niche segments growing double digits. Demand is being driven by factors beyond just labor costs such as expertise, compliance, and customer experience solutions. - Leading BPO vendors can provide full customer lifecycle solutions using advanced technologies. Business process as a service is also extending the scope of services. - M&A activity in the sector will depend on economic conditions but is expected to remain strong as companies look to consolidate and bolster capabilities. Valuations for large enterprises range from

1. Solving the Value Equation
www.ephorgroup.com 1 ©Copyright 2013 Ephor Group, LLC. All Rights Reserved.
BPO Front Office
Contact Center
CRM Services
Findings Report
The front office BPO
market landscape
Ephor Group, LLC
An Ephor Group review of the
Business Process Outsourcing
(BPO) capabilities for front office
contact center CRM services.
Q1

2. Solving the Value Equation
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BPO FINDINGS
The overall BPO services market is organically growing in the single digits, with a few niche
segments and market leaders growing in double digits.
Demand for BPO services is being driven by ROI value beyond labor arbitrage:
 More employers are using outsourced services to gain access to
providers with deep subject matter expertise. An acute
shortage of certified, credentialed mid skill level workforce
talent plus access to the best strategic professionals in the
long-term
 Also, complexity, regulation, and compliance are driving the
need to find simpler solutions to managing their workforce
operations.
 Some leading BPO service vendors can provide full customer
lifecycle solutions including the modernization of the customer
experience (using more advanced technology including cloud,
social, mobile, big data analytics, and customer analytics. The
vendors with advanced service delivery model competence are
growing.
 Increasingly, business process as a service (BPaaS) is
extending the depth and scope of services.
 Rapid advances in BPO procedures using new technologies and
the application of technology on productivity efficiencies.
 Continued outsourcing adoption by emerging and middle
market corporations.
Because BPO buyers are looking for value beyond labor arbitrage, the conversations are
increasingly centered around operating outcomes and buyers look to evaluate service providers
more holistically. Service providers are therefore focused on creating value-added solutions that
include social media channel, customer analytics, and skill development & training to drive
better customer experience management.
Ephor Group, founded in 2002, is a strategic advisory firm exclusively focused on growth
oriented Business Process Outsourcing (BPO) corporations. Since its inception, the firm has
provided outsourced corporate development services and growth capital acquisition advisory
services. This set of capabilities and expertise has resulted in approximately 5,500 new jobs
created over the past decade.
 186 private BPO
inbound/outbound providers
greater than $10m (not
including 41 public
companies nor subsidiaries
with contact center
operations of holding
companies).
 7 private company
acquisitions in 2013 (13 in
2012).
 TBD Jobs Created.
 Valuation multiples for scaled
enterprises 2 to 4X revenue
FINDINGS

3. Solving the Value Equation
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BPO M&A Private Company Deal Transactions
Buyer Seller Vertical
Revenue
Size $m
Deal
Terms Deal Notes
CoAdvantage OdysseyOneSource HRO PEO
ASO
<$25 NA Jan 2013
two of the top ten PEOs in the nation
Budco
(Glencoe Capital)
South Shore
Venture Enterprises
BPO CRM <$25 NA May 2013
expands our footprint in the healthcare and insurance vertical
markets
Allied Global LLC Marketlink Inc Inbound &
Outbound
BPO
$75 NA Sept 2013
Together, the combined entity has 6,000 employees, 19 contact
centers in 4 countries offering services in several languages.
24-7 Intouch Inc Innovative Contact
Solutions (ICS)
Inbound &
Outbound
BPO
NA NA Oct 2013
The facility currently houses 240 seats and is rapidly expanding
its capacity to 600+ seats by the end of the year, bringing 24-7
Intouch’s global capacity to over 2,400 contact center
workstations.
Enhanced Recovery
Company, LLC
"ERC"
TMone Inbound &
Outbound
NA NA Sept 2013
4 facilities acquired. The acquisition positions ERC to deliver
next-generation Customer Experience Management (“CEM”),
providing clients with access to best in class Customer
Relationship Management (“CRM”) and ARM services
Etech Global
Services
Global Contact
Services’ (GCS)
Inbound &
Outbound
BPO
NA NA May 2013
8 worldwide locations including one in Jamaica and 2 in India
employing 2,5000 employees
FusionBPO Simply Outbound
Ltd.
Inbound &
Outbound
NA NA May 2013
Acquired for lead generation and database space in United
Kingdom
*Public Company Deal Transactions: 1 2 3 4 5 6 7
M&A activity in the coming year will depend on a number of
factors, including the slow growth economic conditions.
Gradual improvements in economic conditions and stable debt markets
should help sustain growth in the overall M&A market, although
economic uncertainty will dampen global consolidations. With interest
rates at historic lows and companies looking for revenue growth
opportunities, acquisitions are a natural avenue to bolster market
share, build out brands and fuel longer-term strategic initiatives.
Uncertain economic growth means greater competition for market
share, greater focus on retaining customers.
1
In 2013 SYNNEX (NYSE: SNX) acquires IBM (NYSE: IBM) BPO Customer Care for $505 million, consisting of approximately $430 million in cash and
$75 million in stock. The acquisition will be branded and fully integrated with Concentrix, a wholly owned subsidiary of SYNNEX. 45,000 staff and 50
plus delivery centers focused on 12 industries across 6 continents.
2
In 2013 Innotrac Corp., a provider of outsourced e-Commerce fulfillment, business intelligence and contact center services, was acquired by Sterling
Partners, a leading mid-market PE firm Sterling Partners agreed to purchase the Company for an implied EV of ~$110m (12.1x LTM EBITDA)
3
In March 2014 Global Payments Completes Acquisition of PayPros for $420 million to acquire 58,000 clients.
4
In January 2013 Aditya Birla group sold its Canada-based BPO Minacs Worldwide to a group of strategic financial investors, led by Capital Square
Partners for $270 million. With 5,175 employees and revenues of $450 million and an operating profit of $40 million the deal consideration is 7x
multiple to operating profit.
5
In Jan 2013 TeleTech Holdings (NASDAQ: TTEC) acquired Technology Solutions Group for $99 million.
6
In Dec 2013 iQor announced today the signing of a definitive agreement to acquire the Aftermarket Services business of Jabil Circuit, Inc. (NYSE: JBL) for $725 million. This
acquisition will create the first global company with the capabilities to address the $40 billion market at the intersection of customer relationship management and product
support solutions. Following completion of the transaction, iQor will have more than $1.5 billion in revenues, more than 31,000 employees and operations in 16 countries
around the world
7
Convergys Completes Acquisition of Stream March 2014 for $820 million to create one of the largest firms with Convergys now has 125,000 employees
working out of more than 150 locations in 31 countries, speaking 47 languages, it said in a statement.
 Valuation multiples for
scaled enterprises 2 to
4X revenue multiple
and 8 to 12X EBITDA
multiple.
Private company BPO service
providers with USA headquarters.

4. Useful Capital Strategies for 2014
Ephor Group | www.ephorgroup.com | 24 E. Greenway Plaza Suite 404 | Houston, TX 77046
M&A Forecast & Landscape
We anticipate M&A activity to be quite robust over the next 12 to 18 months as strategic acquire distressed and low
growth assets.
 Mergers and acquisitions in the software, information technology and BPO services slowed in 2013 compared
to the # of transactions in 2012, which rose over 2011 levels.
Overall, strategic acquirers have been focusing on complementary acquisitions, with the majority of transactions less
than $100M; while financial buyers such as PEGs have focused on consolidating market leaders or tuck-in acquisitions
for their current portfolio companies. .
Looking ahead to 2014 and 2015 M&A deals for strategics seeking complimentary assets/capabilities including a fervor
focus on distressed and stagnant businesses without access to capital (those firms stuck in the growth capital liquidity
trap) highlight the forecast.
 There is a shortage of bank and venture capital for those companies with less than $10 million in
EBITDA, but a general surplus for companies with $10 million in EBITDA or more. However, family
offices and new forms of growth capital have emerged to bridge the gap.
 The rising complexities and costs of doing business are causing market bifurcation and the
thinning of middle market businesses.
Capital options landscape:
 Credit facilities will be almost exclusively asset based lending only.
 Venture continues to ride the wave of “Consumerism.” The types of businesses that venture capitalists plan to
invest in the next 12 months are 33% targeting information technology and another 23% planning to invest in
health care or biotech. Approximately 44% of respondents plan to make new investments outside of the USA.
 Mezzanine lenders remain eager to put capital to work with transaction structure and pricing relatively flexible.
 Access to growth capital from PEGs (private equity groups) for branded sector market leaders only.
 M&A corporate development deal valuations will be limited and capped.
 The M&A outlook will remain strong, including deal count volume as cash-rich strategics augment growth and
capabilities.
 Strategics Seeking Growth. Conditions are good for an increase in strategic acquisitions in 2014 and
2015 as U.S. corporations have built up immense balance sheet firepower, with more than $2 trillion
of aggregate cash currently earning a minimal return. Given the sluggish economic outlook, M&A can
be an effective tool for lifting the top line and generating margin improvement through synergies
following an extended period of cost controls.
 Private Equity Financial Sponsors will be focused on selling assets due to pressure to put committed
capital to work and to generate exits. Financial sponsors evaluating platform acquisitions and add-on
deals continue to have in excess of $400 billion in un-invested capital that needs to be deployed as
well as access to debt at reasonable terms. At the same time, achieving fully valued realizations is a
high priority for private equity firms with aging portfolio companies.

5. `
2014 BPO Services eNewsletter
The old saying “You Grow or You Die” has never been more appropriate then now!
“This slow growth economy, the associated anemic labor markets and the
increasing government burdens, coupled with the increasing labor market and
workforce management complexities will continue to challenge us, cost us, and
deter us for quite some time.” Said Meier
The question is what can we do?
Ephor Group Founder Garry E. Meier shares some of his findings,
thoughts and conclusions to solving the many challenges facing us as
service side executives, including growth & growth capital strategies,
based on an eight month tour of operational, business process
outsourcing (BPO) and support center facilities in 13 countries in across
North, Central & Latin America.
Here’s the recap.
Fast Stats:
 The LATAM region has become a receptacle of some 120 new BPO facilities
comprising approximately $350M in foreign investment in the past 3 years
alone. Even with these impressive growth statistics in that region, Ephor
Group has determined the total capacity utilization of BPOs in LATAM
is in the lower 25% quartile, while the English speaking capacity
utilization is even less. Of particular note, there exist a particular
opportunity for the Healthcare Business Services BPO’s to expand and prosper
in LATAM.
 Payroll Services experienced less than 5% growth in sector demand in
2013 driven by an anemic job market & slow GDP growth; while Workforce
Management (WFM) experienced greater than 25% Growth in sector
demand driven by increased reporting, compliance & employment lifecycle
requirements. This trend will continue for the near-term.
Key Metric: COGS and Gross Profit Margin as a Percentage of Labor Costs, needs to be a
real focus area. Don’t hire resumes first… create a more efficient and productive process…
then the resumes.
Key Performance Indicators: Ephor and its management teams measure the
company’s business metrics at times daily, often weekly, and consistently on a monthly and
quarterly bases. Our businesses are “Perform Businesses”. Meier said. “Find the top 8 to
12 key metrics that drive your business then focus the entire company on them.
Get down to a unit of one-based economic systems — such as gross profit per person per
hour."

6. `
The Future: Meier said he expects margin pressure to get increasing more difficult
especially in the North America labor markets due to “the administration’s” increase
in compliance, reporting and cost burdens. Therefore consolidation of especially
“sub-scale” assets to formulate scaled assets will be mandatory for survival and
wealth creation. Ephor suggest that specialized and focused BPO’s, SaaS, and cloud
computing services will be areas of opportunity in the near-term.
Meier concludes: “In my 38 year career I have never seen an economic
cycle or time where well managed and resourced service organizations
have not been successful”
Additionally Meier said “Ephor clients typically acquire one, and many times two,
companies per year. It’s not a roll-up strategy… it’s simply the execution of well
thought out growth strategy.”
Read more from Ephor Group online at www.ephorgroup.com/eresources.asp:
BPO LATAM Nearshore Findings
Beyond Payroll HRO Services
BPO FrontOffice Contact Center CRM Services
For more information contact:
Ephor Group Founder Garry E. Meier
ephor[at]ephorgroup.com
Speaking Topics: The Technology Oriented Business Services Environment: Growth Strategies, Growth Capital Strategies, Corporate
Development Updates, M&A Activity and Sector Insights

7. Solving the Value Equation
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When considering expansion, this is what you need to know:
Growth Capital Options
Strategic Alternatives
State Government Initiatives, Programs
Local Tax Rules & Implications
Corporate Development Options
M&A Forecast & Valuations Forecast
Financing Unit Economics
Business Economic Cost Factors
Industry Macroeconomic Factors
Workforce Competencies
Workforce Labor Supply
Human Capital Supply Chain
Labor Costs Market Analysis
Job & Local Community Contacts
For a detailed overview of your growth options, contact Ephor
Solving the Value Equation
ephor@ephorgroup.com
214.702.6427
24 E. Greenway Plaza, Ste. 400
Houston, TX 77046
www.ephorgroup.com
What Do I Need
To Know To
Expand & Why?

8. Solving the Value Equation
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9. Solving the Value Equation
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For a no obligation overview of the options in your sector, contact Ephor
Solving the Value Equation
ephor@ephorgroup.com
214.702.6427
24 E. Greenway Plaza, Ste. 400
Houston, TX 77046
www.ephorgroup.com
What Are My Best
Growth Strategy
Options?