Keshav R Murugesh (Left) and Partha DeSarkar (Right)

Several pure-play business process management (BPM) companies are taking the acquisitions route to build digital capabilities to meet the evolving needs of their clients.

Hinduja Global Solutions (HGS) has made two acquisitions in December alone as part of its evolution into a digital-led customer experience services provider. It has entered into a definitive agreement to acquire a 100% stake in analytics service provider TekLink International for $58.8 million and it has signed a “non-binding letter of intent” to acquire uKnowva, a cloud-based software-as-a-service (SaaS) platform.

“TekLink and uKnowva with their transformative solutions in the analytics and financial planning and HR technology segments, respectively, are a good strategic fit for us. The synergies will help us strengthen our existing digital portfolio substantially, expand in new rapidly growing segments, co-create solutions, and cross-sell to clients,” said Partha DeSarkar, group CEO, HGS.

The acquisition of TekLink International, a full-service financial planning and analytics service provider, is expected to strengthen HGS’s digital solutions business by adding expertise in building data platforms, analytics, and financial planning. It will also add complementary digital workforce bench strength, with 275 technology and implementation professionals joining HGS as part of the transaction. HGS’s digital business currently employs over 750 core technology and digital marketing experts, primarily across the US and India.

uKnowva which has over 75 employees in India supporting over 300,000 users across 80 clients will create technology synergies with HGS’s existing human resource outsourcing/payroll and finance & accounting business, that supports clients with mainly HR operations related activities in India and the Middle East today.

In December also, WNS acquired two companies — London-based The Smart Cube, a platform-driven research and analytics firm, and Poland-based OptiBuy, a leading European provider of procurement platform consulting and implementation solutions. These assets are complementary to WNS’s existing offerings and strengthen its capabilities in both high-end procurement and advanced analytics.

“Both these companies possess unique, digitally-led human intelligence capabilities which are complementary to WNS’s existing procurement and analytics offerings, and are also complementary with each other,” said Keshav R. Murugesh, CEO, WNS. “The Smart Cube and OptiBuy bring experienced leadership teams, highly specialised resources, and differentiated technology offerings to the WNS portfolio. These companies also have blue-chip customer bases with extensive cross-selling opportunities, and proven track records of delivering strong top line growth, healthy margins, and high levels of customer satisfaction.”

In January 2022, NYSE-listed Genpact acquired Hoodoo Digital, a digital experience consultancy with deep expertise in Adobe solutions. This is the latest in a series of investments Genpact has made over the last five years — including its acquisition of Rightpoint in 2019 — to build expertise in helping its global clients drive transformation.

Analysts believe, a lot of these acquisitions are driven by the company’s strategy to expand into newer capabilities and geographies. “Most of the acquisitions are taking place in the pure-play BPM space versus IT-BPM companies as the latter would already have the digital and technology capabilities,” said Rajesh Ranjan, partner and global head, BPS, Everest Group.

Going forward, more such acquisitions are expected to take place. “This is for two reasons. First, valuations are more reasonable in a recessionary environment. Second, many captive units or global capability centres (GCCs) that have not been able to add significant value to the parent organisations but have specific BPM skill-sets come as strategic acquisition targets. We expect both pure-play BPM and IT-BPM players driving this strategy,” said Ranjan.

Courtesy: FE