The potential merger between Majorel Group Luxembourg S.A. (Majorel) and Sitel Group® would create a CXM colossus and firmly put the combined entity in the top three providers of these services. Read on to learn about the synergies between the companies and what all the recent M&A activity means for the Customer Experience Management industry.
If approved, fusing the two organizations would create a new publicly-listed firm headquartered in Luxembourg, trading on Euronext Amsterdam. The new entity would have more than US$6.4 billion in revenues and 240,000-plus employees, creating a “Big Three” in the Customer Experience Management industry along with Concentrix and Teleperformance.
With both firms registering an impressive 30%+ growth in 2021, it will be interesting to see how the merger synergies help the new entity chart future growth. Potential growth drivers include:
- Scale – The combined entity will have a scale of 240,000+ FTEs in 55 countries and 300+ sites, delivering services in more than 70 languages worldwide. It will have a global reach with 1,000+ clients across many industries and geographies, with particularly deep expertise in the Banking, Financial Services and Insurance (BFSI), technology and Fast Growth Tech (FGT), and telecom sectors
- Markets – While the combined entity will be global, it can leverage both parent firms’ strong presence in the Americas and Europe markets. Sitel Group’s client portfolio in North America, UK, France, Nordics, and Asia-Pacific (APAC), catered through delivery sites in Latin America (LATAM) and Asia, complements Majorel’s clientele in LATAM, Germany, Spain, Portugal, Benelux, and Italy with nearshore delivery from Eastern Europe and Africa. This might also lead both players to sever regional partnerships now that their combined geographic footprint covers most regions
- Capabilities – Both Majorel and Sitel Group have powerful CX, digital, and consulting capabilities. With the acquisition of SYKES by Sitel Group® in August 2021, the latter strengthened its automation and digital marketing capabilities, which could supplement Majorel’s suite of vertical-specific solutions, especially for the BFSI and e-commerce segments. Sitel Group’s extensive talent management practices through Sitel® MAX (My Associate Experience) and MAXhubs also will positively contribute to the new entity’s cloud-based, remote working model, supported by Majorel’s several multilingual hubs in Europe and Africa
- Clients – Majorel’s subsidiary for start-ups, majUP, is expected to plug the gaps in Sitel Group’s Small and Medium Business (SMB) portfolio and would enhance the combined entity’s ability to cater to potential unicorns and hyper-scalers, especially in Europe
- Integration experience – Both firms have a positive track record of acquisitions and integrations, especially with Sitel Group acquiring SYKES recently and Majorel purchasing smaller firms such as Mayen, junokai, and IST Networks in 2021
This latest deal continues the spate of big mergers and acquisitions in the CXM industry over the past year, in addition to Sitel Group buying SYKES. Webhelp purchased Dynamicall in March 2021, OneLink in July 2021, and Grupo Services in June 2022. TTEC bought Avtex in April 2021, and Concentrix acquired PK in December 2021. Comdata Group announced a merger with Konecta in April 2022.
Let’s take a look at the combined impact on the customer experience management industry at large:
- Accelerated digitalization – The investment, from both a delivery and technology perspective, required to deliver CX and remain competitive in the industry has now increased, creating a potential barrier to entry for smaller providers
- Increased supplier consolidation – With buyers looking for supplier consolidation post-pandemic, global providers such as Teleperformance, Concentrix, Sitel Group, Webhelp, and others are in a sweet spot as buyers want to work with fewer providers with more global and comprehensive capabilities. A larger footprint of capabilities helps ensure that bigger providers are top of mind in an ever-competitive industry
- Smaller players find their niche – The fragmented CXM market comprises several specialist providers that continuously innovate and redefine themselves to stay competitive and grab a share of the US$300+ billion global CXM spend (comprising both outsourced and in-house operations by enterprises). These niche providers include Arise, a CXM provider for virtual delivery; GlowTouch, a women-owned services provider with a focus on impact sourcing; and 7.ai, a conversational Artificial Intelligence (AI) leader
We are excited to watch what the marriage of these two giants will bring to the customer experience management industry. Some concerns exist around the timing of the integration being so close on the heels of the SYKES acquisition, as well as buyers having less choice for transformation-oriented strategic partnerships. Despite these issues, this proposed merger, without a doubt, would create a global CXM leader with the ability to shape the customer experience management industry for years to come.
Please reach out to us to discuss this proposed merger and changes in the CXM market.
You can also attend our LinkedIn Live session, Who is Leading Customer Experience Management (CXM) Services in Europe?, to learn the results of our recently completed PEAK Matrix® assessment showcasing our latest CXM research in the EMEA region.