Paris: Capgemini has reinforced its BPO offering with the acquisition of the Order to Cash (OTC) business of US-based Vengroff, Williams & Associates, Inc., a world leader in the accounts receivable collections market.
Capgemini says this niche acquisition is part of a strategy to extend its footprint and specialist expertise.
Run under the brand 'VWA', the acquisition will enable Capgemini to extend its Finance and Accounting (F&A) BPO practice. F&A has been the main growth engine for Capgemini's BPO business, driving over 60% of its revenue last year.
The deal gives Capgemini onshore OTC capabilities, mainly in the United States, as well as process expertise; some 300 VWA experts will join Capgemini's 12,000 staff BPO organization.
Capgemini and VWA have already been working together for over a year, and Capgemini has paid undisclosed cash for VWA and a set of OTC software products.
Capgemini says OTC BPO services can help clients reduce revenue leakage, accelerate the cash-flow cycle and limit bad debt expense. Revenue leakage from cash collections can account for up to 5% in some firms. The OTC and collections BPO market size is expected to reach $31bn by 2012 and is growing by more than 10% per annum according to NelsonHall, a BPO analyst firm.
VWA has eight outsourcing delivery centers — two in the US and six in Europe: UK, Germany, France, Netherlands, Spain and Italy.
Capgemini has also acquired a significant, though unspecified, equity stake in the Vengroff, Williams & Associates, Inc. subsidiary that owns the Webcollect O2CPro software, with VWA retaining a majority holding in it. This subsidiary will continue to be run as an independent entity and that the software will continue to be licensed to clients and other service providers.
Robert G. Williams, Chairman at Vengroff, Williams & Associates, Inc., who joins Capgemini as Head of the BPO Order to Cash service, commented, "We are thrilled to join a global team which has a great reputation in the market for Finance and Accounting BPO and which seems a perfect fit for our business. Capgemini's BPO business has global scale and reach, together with great vision in BPO. This combined with our deep expertise in OTC and collections should prove to be a winning combination."
Hubert Giraud, CEO Business Process Outsourcing at Capgemini, commented, "This acquisition is a perfect next-step for our growth strategy. It will further strengthen our global BPO offering through VWA's domain knowledge, on-shore center capabilities and US presence. Capgemini's BPO service is focused on delivering the best outcomes and real benefits to our clients. VWA will bolster our offering in the Order to Cash arena, giving more value for our existing clients and a strong new entry point for new customers. Combined with VWA, Capgemini strengthens its position as a leading player in this field."