IBM Sells Customer Care Unit For £319m

IBM has signed an agreement that will see Synnex acquire Big Blue’s worldwide customer care business process outsourcing services unit for $505 million (£319m).

The deal is made up of approximately $430 million (£272m) in cash and $75 million (£47m) in stock.

Deal Reasons

According to the companies, the acquisition will be branded and integrated with Concentrix, a wholly owned subsidiary of Synnex. As part of the transaction, Synnex will enter into a multi-year agreement with IBM, and Concentrix will become an IBM strategic business partner for global customer care business process outsourcing services.

IBM’s strategy has been to consistently shift its portfolio to higher-value offerings, through acquisitions, divestitures and organic development. For example, to strengthen its business process outsourcing business, IBM acquired Kenexa to add skills and analytics to human resources business process services. In addition, with the acquisition of Emptoris, IBM added analytics to supply chain management services.

At the same time, IBM has divested in some areas of the business, such as PCs, hard drives and point- of-sale systems. This latest announcement is consistent with that strategy.

The customer care process services business is evolving, with big data and high-value analytics software playing a greater role in transforming how customer care is delivered as a unique experience. With its Smarter Commerce initiative, IBM is an established leader in applying its core strengths in big data and analytics to help chief marketing officers and retail industry clients leverage big data for more targeted, personalised services that customers value.

Customer Care

Concentrix is a provider of customer care services, including call centres, as well as specialised end-to-end processing for banks, insurers and health care clients. Its skills and services complement those of IBM. As a result of acquiring IBM’s customer care business process outsourcing unit, Concentrix will manage customer care business process outsourcing for clients in more than 12 industries, as well as front- and back-office services for retail and commercial banking and claims processing for life, annuity and health insurance.

IBM will continue to invest in new technologies and acquisitions for business process services in areas including finance and accounting, supply chain management, human resources and mortgage services. Just last week, EAGLE announced a new mobile app and digital service for banks that manage the mortgage process so that borrowers can track their mortgage applications using any mobile device.

“We are very excited to bring together these two great teams, each recognised by their clients as leaders in providing outstanding and innovative solutions,” Kevin Murai, president and CEO of Synnex, said in a statement. “This acquisition will significantly extend our portfolio of offerings and delivery capabilities that will make Concentrix a global Top 10 player in this growing market.”

By partnering with Concentrix for customer care services and leveraging Concentrix’s ongoing investments in this business, IBM and Concentrix plan to jointly deliver a solid approach for transforming and delivering high-value interactions at every stage of the customer care lifecycle.

“Our clients are investing at an unprecedented rate, in order to engage with and service clients across multiple channels,” Lori Steele, general manager of IBM Global Process Services, said in a statement. “This partnership between IBM and Synnex will provide our clients with the innovation they have come to expect from IBM through our deep capabilities in advanced analytics, social business, cloud and smarter commerce, complemented by Concentrix’s flexible and adaptive global customer care delivery network.”

The transaction is expected to close in the coming months, subject to the satisfaction of regulatory requirements and customary closing conditions. After the transaction closes, IBM will have an equity interest in Synnex, IBM officials said.

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Originally published on eWeek.