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- Christa Heibel
- Mergers and Acquisitions
What to Know about the Sensitive Nature of Mergers and Acquisitions
- Christa Heibel
- 23 September 2020
The process of a merger or acquisition is complex. While BPO buyers are plentiful, sellers are harder to source. And since selling your contact center comes with some vulnerabilities, protecting yourself against the competition comes first. In this article we discuss acquisitions, how they work, challenges to watch for and how a trusted third party can benefit the process.
The Contact Center Acquisition Process
In an acquisition, a company purchases another company and its resources. This is one of the ways to grow a contact center business. For instance, an acquisition can help expand into new markets and acquire new assets. As a result, the business can become more competitive.
Create a Strategy
In the strategy phase, the buyer and seller define their goals for the acquisition, their ideal type of company to do an acquisition with, and what they want the process to look like ideally. Current financial positions and future projections need to be carefully considered. Other important factors to consider are company size and culture, products and services offered and types of customers served.
Connect with Companies
After creating a strategy, a buyer starts searching for ideal companies. When it finds a company it’s interested in, it will send it a letter of intent, describing a proposal for an acquisition. On the seller side, once a seller is interested in selling, they will create a detailed document about their company to present to buyers. The buyer will use the information in the document to evaluate the strength of the company. A SWOT analysis may also be performed to evaluate a company’s strengths, weaknesses, opportunities, and threats.
Negotiating a Deal
During the negotiation stage, the buyer will use information about the company it wants to acquire and its valuation to present a proposal. The two companies will negotiate the deal and then sign it once they have come to an agreement.
During this phase, the buyer evaluates the company’s operations, financials, and culture in more detail before finalizing the purchase. After this process is completed, the final contracts are signed to close the deal.
There are many considerations when buying or selling a contact center business. Here are some key points to keep in mind:
- As a buyer, find out and be considerate of the seller’s reasons for selling a contact center business.
- Be aware of the difference between “friendly” versus “hostile” acquisitions. During a friendly acquisition, the buyer involves the seller’s shareholders and board of directors in the acquisition process. But in a hostile acquisition, the buyer does not involve the board of the seller company.
- Be sure there is enough potential financial gain from the acquisition to make it worthwhile.
- Consider whether the seller company’s mission, culture, structure, roles, and resources can be well matched to your current company and goals and prepare a transition plan.
The Benefits of Using a Trusted Third Party
A trusted third party can offer a neutral perspective and guidance for the steps in the contact center acquisition process – and beyond. They can give you a more objective view of the valuation process and help with research, planning, negotiations, closing, transition and implementation.
CH Consulting Group provides expertise in the merger and acquisition process. Whether your goal is to sell your established business or acquire one – or more – new ones, you can benefit from CHCG’s years of experience. Our deep industry connections and commitment to confidentiality protect both buyers and sellers and help streamline what can otherwise be a lengthy and expensive process.
Contact Christa Heibel directly to learn more about how CH Consulting Group can help you either buy or sell BPO businesses.
We’ve recently partnered with a company actively seeking to acquire US-based BPOs with annual revenues of $20M or less. If you’re thinking about a merger or acquisition opportunity – or simply want to learn more – this may be of interest to you.
The buyer currently provides BPO services to Fortune 500 and mid-market companies and wants to scale the business through the acquisition of established BPOs such as yours. What makes this buyer especially unique is the desire to partner with new acquisitions to promote growth for all concerned.
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