Narayan AmmachchiAlorica is acquiring several of Omaha-based West Corporation’s agent services businesses for US$275 million, in a deal that will add 1,500 employees to the BPO provider in the nearshore region alone.
The businesses it has agreed to purchase represented approximately $580 million in revenue last year. Therefore, Alorica says its annual revenue will balloon to $1.2 billion after the West units are integrated into its operation.
Irvine, California-based Alorica said the acquisition will broaden its product offerings and market reach, besides bolstering its delivery capabilities.
“Today’s acquisition strengthens Alorica’s market position, allows us to scale faster and expands our reach into new vertical markets. By combining the strengths of both companies, we will be able to deliver immediate value to our customers,” said Andy Lee, CEO, Alorica.
For decades, West’s agent services businesses have provided large-scale customer contact solutions to a wide range of vertical markets. But the Omaha-based firm now wants to spin off much of its labor-intensive services and move toward more lucrative technology-based communications services.
West has employed thousands of home-based customer service agents; in the Unites States alone, 5,000 of its agents work from home.
The acquisition adds new verticals to Alorica’s portfolio, including healthcare, utilities and government, while strengthening its existing verticals such as communications, retail, travel, financial services and consumer products.
Among the new offerings being added to Alorica are receivables management service, customer-facing services like direct-response marketing, and debt-collection services.
Over the coming months, West’s 1,500 employees in Jamaica and Mexico, 5,400 employees in the Philippines and 18,400 staff in the United States will move to Alorica, taking its total headcount to 48,000.
The deal, subject to regulatory approvals, is expected to close by March this year.
West was founded in 1986 to to handle telemarketing calls. The company grew slowly but steadily as it won more customer service contracts. In November 2014, West’s school alerts business grew significantly with the acquisition of St. Louis-based GroupCast.
West has retained Health Advocate, which it bought last year.
Alorica needs to start paying their employees better. The contracted AT&T line group is only paid $10.00 per hour to do the exact same thing that AT&T pays their employees $25.00 per hour to do. Minimum wage in Nebraska is $9.00 per hour. Other similar companies in the area are paying $12.00 per hour and up for contracted phone work. Then Alorica wonders why they cannot keep employees around. Many leave before they are out of OJT to better paying jobs that have a smaller scope of duties.