U.S. Private-equity firm Carlyle Group LP has reportedly reached a deal to acquire a majority stake in VXI Global Solutions, a Los Angeles-based BPO firm with extensive operations in China and Central America.
The deal values the outsourcer at around US$1 billion, according to the Wall Street Journal, which reported the acquisition citing unnamed sources.
Carlyle Group acquired VXI Global as it believes China will overtake India and the Philippines to become the major destination for the world’s business process outsourcing industry.
One of the few large foreign BPO firms in Asia’s biggest economy, VXI Global has delivery centers in six Chinese cities in addition to the Asian financial hub Hong Kong. The company counts China’s largest e-commerce firm Alibaba among its clients.
VXI Global grew into a major player in China’s outsourcing industry last year when it acquired Europe’s outsourced product development (OPD) services provider Symbio with both sales and delivery centers on the Chinese mainland.
About 17,000 people work for VXI globally, with more than 8,000 working in China alone. In Latin America, VXI has delivery centers in Guatemala, El Salvador, and Barranquilla, Colombia.
This is the fourth Carlyle Group BPO acquisition in the past two years. Earlier this year, the equity firm purchased a 90% stake in Spanish outsourcer Digitex Grupo with an established presence in Spain and across Latin America.
“While India and the Philippines have benefited from a stronger English-speaking workforce, China could become a more-competitive destination for such jobs as more customer interactions move online through email and social media,” says the Journal.
According to Forbes, China’s outsourcing market is growing by 30% annually.