HR outsourcing firm Secova acquires US-based EmpactEBS

Secova eServices Limited, a Chennai-based BPO company purely focussed on the human resource (HR) BPO space has acquired US-based EmpactEBS, in a deal valued at about $5 million.

The acquisition will provide the neccessary impetus for Secova for its customer acquisition initiatives in the US and has already helped increase their customer base four fold from five to 20. The deal was primarily funded from the Rs 7.2 crore investment made by IL&FS for a minority stake in the company in September last year.

"Our strategy to move up the value chain and focus on HR BPO is certainly paying off. The company's best-shore strategy that offers a blend of onshore and offshore services, which can be customised to the client's requirements has received overwhelming response setting the stage for rapid growth," said, Venkat Tadanki, co-founder and CEO, Secova eServices.

The founders of EmpactEBS, Joseph Bevacqua and Joel Carter have joined as directors on the Secova eServices board and will help with the acquisition of new customers in the US.

Secova is planning on more than doubling its total workforce to 200 in 12 months time from the current 90. The best-shore strategy will see Secova delivering 80 per cent services from its Chennai facility, with the remaining 20 per cent being onshore at client locations in the US. As part of the deal Secova has also acquired the proprietary HR software of EmpactEBS which is a middleware technology helping Secova deploy all its services across all available platforms without the client having to migrate to its software.

Secova which till now has relied more on payroll processing for its revenues will also be able to deliver services in leave administration, recruitment, HR administration, health and welfare benefits.

Gartner Inc estimates the HR BPO space in the US to be $40 billion and growing at 14 per cent annually. "The Indian HR BPO space is at around $30 million right now and should grow to $2 billion in four years as there is a huge potential for growth," added Tadanki.

The other major Indian players in the HR BPO space are Hewitt Associates, Fidelity Investments Consultations,Exult Inc and Automatic Data Processing Inc.