By Max Clarke
UK based public sector Services Company, Serco (LSE: SRP), has announced the acquisition of Indian outsourcing business, Intelenet, in a deal worth £385 million.
The deal will better place Serco in the lucrative Indian emerging market, priming the business for growth of an estimated 15%.
"The acquisition of Intelenet supports our ambitions as a leading global service company,” said Serco CEO, Chris Hyman. “The international BPO market is growing quickly as companies seek out new ways to improve their service and reduce costs. Intelenet's high value capabilities and customer base, together with its economies of scale, means we can access new markets and strengthen our existing propositions. I am particularly delighted that the Intelenet management team will join us to continue driving the business forward. Their passion for their customers and people, and their philosophy of service excellence, means they will be a great asset to Serco."
The acquisition of Intelenet will provide access to attractive markets. The size of the addressable global BPO market is estimated at some $350bn to $500bn, according to the Everest Research Institute. Around $200bn of this is currently outsourced, with $40bn being provided internationally. This international BPO market, where Intelenet is strongly placed, is forecast to grow by around 15% per annum. International BPO in India represents around $15bn or 32% of the market. The major source of market growth is anticipated to be serving the US and the UK, with the Banking, Financial Services and Insurance market continuing to represent the largest addressable market opportunity.