Another Day, Another Outsourcing Acquisition

by: Outsourcing Insider

By Audrey B.

The outsourcing industry has been defined just as much by acquisitions as by mega deals. Think Xerox (NYSE:XRX) and Affiliated Computer Services. This November, several companies have announced acquisitions of other firms in a bid to redefine their services and expand their business and perhaps to give rise to the next Xerox-ACS caliber acquisition within industries including legal process, IT and call center outsourcing.

New York-based Accenture (NYSE:ACN) has acquired business process management services provider Knowledge Rules. The company announced Nov. 2 that it had acquired the Philadelphia-based company to utilize Knowledge Rules’ expertise in PegaSystems. According to Accenture’s Chief Technology Architect Paul Daugherty, “This acquisition immediately increases our capacity to implement Pegasystems-based solutions, and will enable us to train and develop more people, more quickly.”

A few days later on Nov. 10, Accenture announced that it had successfully acquired Beijing-based software company Mogenesis, a provider of mobile software outsourcing services. Accenture also completed its acquisition of Ariba, Inc.’s (NASDAQ:ARBA) Ariba Sourcing Services on Nov. 19, an acquisition that had been announced a month earlier. Hot on the heels of these developments Accenture again advised that it is acquiring another company, CAS Computer Anwendungs-und Sytemberatung AG (CAS). A Kaiserslautern, Germany based company, CAS is a provider of customer relationship management (CRM) and a mobility software provider.

It has certainly been a busy month for Accenture, which has been acquiring companies left and right, but other companies have been making notable acquisitions as well.

Financial news and information provider Thomson Reuters (NYSE:TRI) announced Nov. 18 that it is acquiring legal process outsourcing services provider, Pangea3. Commenting on the acquisition, Peter Warwick, Thomson Reuters President and CEO said “[Thomson Reuters] will now bring to the legal marketplace a responsive, high-quality, transformative resource for a broad range of legal support work. This is particularly important as law firms and general counsel adjust to the realities of the ‘new normal,’ where efficiency, quality and responsiveness are paramount,” signaling Thomson Reuters entrée into the highly-competitive legal process outsourcing (LPO) business.

This is not the only action in the LPO space. Days before Thomson Reuters' move, the news making the rounds was about the Nov. 11 acquisition of legal process outsourcing company LawScribe by UnitedLex.

Also this month, a number of smaller companies made acquisitions, including the $93.4 million acquisition of IT and business process outsourcing provider TechTeam Global (TEAM-OLD) by Stefanini International Holdings Affiliate, Stefanini IT Solutions. The news came days before TechTeam Global reported a third-quarter 2010 net loss of $8.4 million following the company’s sale of its government subsidiary, TechTeam Government Solutions, to Jacobs Engineering Group (NYSE:JEC).

We will likely see more acquisitions before the year ends. Other companies such as Infosys (NASDAQ:INFY) and Globallogic, have already announced that they are in the market for acquisitions this year and the next, as companies continue to search for the winning combination that may ultimately land them at the top of their field.

Disclosure: No positions