The Business Process Outsourcing (BPO) sector has come a long way in recent years and now covers most white-collar functions in the value chain. In the report, Baird looks at business models, technology enablement and M&A themes in the following subsectors that collectively account for $150 billion of annual revenue:
- Finance & accounting (F&A), fund administration and fiduciary services
- Governance, risk and compliance (GRC) services
- Human resource outsourcing (HRO)
- Outsourced customer care (OCC)
- Legal process outsourcing (LPO)
- Insurance related outsourcing
Our analysis of 220 M&A transactions shows an average multiple of 10.7x EBITDA, representing strong underlying market growth, increased delivery of BPO via software and attractive financial characteristics of acquisition targets.
Baird expects continued consolidation in the BPO sector given the fragmented nature of the market. Both corporate acquirers and private equity firms are building scalable BPO platforms that offer value-added services to their clients.
Learn more about Baird’s Global Technology & Services platform.