24/7 Customer has US, UK buyouts on its radar

Business process outsourcing (BPO) services provider 24/7 Customer today said that it was looking at acquiring a company in the US or UK.

With this announcement, the company has quashed all speculations that it is the next big third-party BPO services provider to be acquired.

S Nagarajan, co-founder, 24/7 Customer, said, "We are looking at buying out a company that will supplement our current services. Rather than a niche process, a supplementary service provided out of a different location, such as the US or UK, will augur well for our customers. The target company must have revenues of around $15 million."

Currently, about 35 per cent of 24/7's revenues come form the UK, while US contributes the rest. 24/7 handles over 20 engagements within these two regions.

The reason for the company to go for an acquisition in these regions is to gain more traction from its existing customers.

"The acquisition is purely based on customer requirement. Though our customers are currently outsourcing, we feel that the entire business in not coming to us. Before a project is actually outsourced, there is this a significant amount of work that is being done on-site and this is being bagged by local companies."

Nagarajan added that acquiring a firm that is closer to its customers will make his company the preferred player for the initial on-site work. "Following this, work will gradually move off-shore to bring in the benefit of cost, without compromising on quality."

Ever since IBM took over Daksh, there was a strong speculation that 24/7 is the next third-party player to be acquired.

The company had registered a significant growth in the financial year to March 31, 2004. During this fiscal, the company claims, it has grown by over 100 per cent.

In the same fiscal, its staff count went up from 1,400 to 3,550. The number of processes handled also went up from 19 to over 50.

Recently, 24/7 announced that it will move to its campus in Bangalore this year. The company has earmarked an investment of $15 million in this year and a significant amount would go towards this new five-acre campus. The company plans to raise the headcount to 7000 by the end of this year.

Having received a $22 million funding from Sequoia Capital to fund growth and expansion in June 2003, 24/7 also opened its new state-of-the-art contact centre in this March.

The firm has invested $6 million in this new 1,000-seat facility.