Call centre investments: Supporting the recovery

Between June 2007 and the first quarter of 2010, no fewer than 12 investments focussed on companies running or supporting call centres, according to unquote" research. Regionally, France, the Netherlands and the DACH region were most active, indicating the industry is ripe for consolidation in continental Europe, possibly following the example of the more mature UK market.

The DACH region accounted for seven transactions and while most of these were completed at the lower end of the value spectrum, there were also a couple of larger transactions.

Walter Services, acquired by Odewald & Compagnie and capiton AG from Gilde Buy Out Partners in a secondary transaction, was a substantial mid-market deal, worth an estimated €200m. Another secondary deal was closed in France in the second half of 2007, where CIC LBO Partners led a consortium backing the secondary buyout of Armatis for an enterprise value estimated to be above €70m.

Call centres have benefited from the continuing outsourcing trend, with growth rates reported to be between 20-30% prior to the financial crisis. With cost pressure currently a main driver, this trend should remain intact for a while to come. In addition, the market is highly fragmented, and acquiring further call centres to spread the regional footprint, or incorporating additional competencies, makes for a relatively easy buy-and-build strategy.

With call centres faring well in the crisis, it comes as no surprise that add-ons accounted for a good portion of private equity activity in the sector. For example, Quadriga Capital backed Tectum Group in the acquisition of Alex & Gross Communications GmbH in May 2009, after acquiring Tectum in late 2007. And Barclays Private Equity added adm group to portfolio company PREMIUMcommunications in January 2009.

However, the financial crisis also creates opportunities. Walter Services, for example,  acquired two call centers from insolvent retailer Arcandor AG.

With struggling retailers looking to cut costs by outsourcing their customer services, and other firms hoping to divest non-core call centre assets, 2010 could be an opportune time for private equity investors to pick up the phone.

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• Topics
• Support services
• Buyouts
• UK / Ireland
• DACH
• France
• Benelux
• Germany
• France
• Netherlands
• CIC
• Barclays Private Equity
• Quadriga Capital