Two major customer management services will join forces as Convergys Corp. (CVG) acquires Stream Global Services Inc. for $820 million, creating the second-largest such company in the world, after Amdocs. Convergys clients include AT&T and Comcast and Stream’s customers include Microsoft and Salesforce.
The two companies have a definitive merger agreement, and Convergys said it expects the complementary transaction to “expand and strengthen its U.S. and global presence,” as well as add about 35 cents in diluted earnings per share (EPS) in the first 12 months after it closes. Total company revenue is expected to be more than $3 billion post-merger.
Stream serves technology, computing, telecom and financial services companies, among others, with business process outsourcing for sales, customer care and tech support. Convergys said that the company’s “marquee client list” is complementary and that Stream’s expertise in technical support services should strengthen its position in the tech industry.
The acquisition also expands Convergys’ global footprint, with resources in the Americas, Europe, Asia-Pacific, the Middle East and Africa. In particular, Convergys noted that Stream’s in-country language skills in Europe and Latin America are expected to boost Convergys’ ability to serve multinational companies.
“This acquisition is an important step forward in our plan for strategic growth and value creation,” said Andrea Ayers, president and CEO of Convergys, in a statement. “Both Convergys and Stream have a history of commitment to our clients, and dedication to excellence in representing the world’s largest brands. We expect this transaction to be highly accretive and to allow us to leverage our strong balance sheet to position Convergys for enhanced revenue, margin improvement and EPS growth.”
Ayers added that the merger is anticipated to diversify Convergys’ client base and enable the company to “offer a wider range of customer transactions in a more cost effective manner from multiple geographies, at scale.”
Once the deal is complete, Convergys anticipates having about 125,000 employees in more than 135 contact centers in 25 countries, using 35 languages. The transaction is expected to close in the first quarter of this year.