Teleperformance Acquires Senture, a Significant BPO Operator for Government Services in the United States
This acquisition strengthens Teleperformance’s citizen lines of service, already active in the United States, UK, Continental Europe, Middle East, Asia and Africa.
Teleperformance , a leading global group in digitally integrated business services, announced that it has acquired Senture, a significant business process outsourcing (BPO) operator for government services in the United States, from Kingswood Capital Management, L.P. (Kingswood), a US private investment firm based in Los Angeles, California.
Founded in 2003 and headquartered in London, Kentucky, with revenue of US$192 million and an adjusted EBITA margin of 16% (2021e), Senture offers a unique onshore citizen experience delivery model, well aligned with US government requirements.
Government services (Federal, State and Local) represent nearly 80% of Senture’s revenue, while commercial healthcare support services represent the remaining portion. Senture’s citizen support activities are specifically designed to handle queries in healthcare, education, transportation and social services.
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“When completed, the deal will create immediate value for Teleperformance shareholders as it is expected to be accretive to earnings on a pro forma basis for 2021”
For Teleperformance, the rationale of the acquisition is supported by three factors:
– Teleperformance is pursuing its vertical specialization strategy by strengthening its citizen lines of service, already active in the United States, UK, Continental Europe, Middle East, Asia, and Africa; the acquisition is opening up new opportunities for growth in the US.
– Senture benefits from sound financials, with strong top line growth and an EBITA margin above that of Teleperformance.
– The operation is accretive to Teleperformance’s earnings per share by around +5%.
The consideration for the transaction (enterprise value) is US$400 million. The acquisition is fully financed through debt. Paul Hastings LLP acted as legal advisors to Teleperformance in connection with the acquisition. Goodwin Procter LLP and Robert W. Baird & Co. Incorporated acted as legal and financial advisors, respectively, to Senture and Kingswood in connection with the acquisition.
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Teleperformance Chairman and Chief Executive Officer Daniel Julien, said: “Senture delivers critical services to a large number of clients in the high-potential government services market in the United States. It is a great organization with a growing onshore network of more than 4,500 advisers, of which 85% work from home. This acquisition will reinforce the Group’s global leadership in the citizen lines of service vertical, which offers strong potential growth worldwide, notably in the US. It also positively impacts Teleperformance’s profitability profile. This acquisition is consistent with Teleperformance’s vertical specialization strategy.”
“When completed, the deal will create immediate value for Teleperformance shareholders as it is expected to be accretive to earnings on a pro forma basis for 2021,” he added.
“Senture is a truly differentiated asset in the government BPO industry,” said Alex Wolf, Managing Partner of Kingswood. “We are extremely grateful to Senture and its management team for their partnership and relentless execution under our ownership, which has resulted in significant growth, strengthened market positioning, and impressive diversification into new verticals. This investment is a perfect example of Kingswood’s value-added, operational improvement strategy.”
