StarTek Acquires MDC Partners’ BPO Unit for $16 Million

U.S. call center firm StarTek Inc. has reached a deal with MDC Partners to acquire the latter’s BPO unit Accent Marketing Services for US$16 million. With more than 2,300 employees …

U.S. call center firm StarTek Inc. has reached a deal with MDC Partners to acquire the latter’s BPO unit Accent Marketing Services for US$16 million.

With more than 2,300 employees and delivery centers in six U.S. locations as well Jamaica, Accent serves as many as 18 clients from several industries, including telecom, technology, retail, financial services and consumer products.

“The purchase builds upon our strategic plan to diversify our client base and enhance our customer engagement solutions,” said Chad Carlson, President and CEO of StarTek.

Accent, whose annual revenue exceeds $67 million, fits well with StarTek, particularly because it has many clients in the U.S. telecom industry, which is StarTek’s key industry vertical.

Telecom firms account for nearly 80% of StarTek’s revenue but about four years ago this heavy reliance on such clients pushed StarTek closer to the brink of crisis, forcing the company to close nearly a dozen call centers across the United States.

In its recent quarterly report, however, StarTek claimed that revenue from verticals excluding telecommunications/cable and media increased 197% to $16.1 million compared to the same quarter the previous year.

“The acquisition highlights not only the ongoing consolidation within the contact center outsourcing space, but StarTek’s increased presence in the North American CRM services space,” commented Peter Ryan, a Lead Analyst with research firm Ovum.

“More generally, this is also a clear sign of ongoing market tightening among CRM outsourcers.  This trend has been manifesting itself during the recent past, and shows little sign of changing as vendors position themselves both in terms of scale and capabilities in order to win new business and retain existing contracts.”

It seems that MDC decided to sell Accent in a bid to free up funds and focus on areas where it can make money relatively easily.

“The sale of Accent allows MDC to emerge as an even faster-growing, higher margin and less capital-intensive business overall, centered on the activities that we expect will deliver the most growth in value to our shareholders over the long-term,” said David Doft, Chief Financial Officer of MDC Partners.

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The acquisition of Accent expands StarTek’s operations to Jamaica, a market that has seen a significant surge in call center activity in recent years.

Upon incorporating Accent’s 2,300 employees, StarTek will have more than 50 clients and over 14,000 employees across five countries.

Like most of its peers, Accent provides customer care service through important channels including phone, online and social media.

StarTek says Accent’s Customer Engagement Agency model will enhance the analytic capabilities that the company gained through its acquisition of Ideal Dialogue in 2013.

“Accents’ data-driven approach helps brands maximize their engagement with consumers and enables brands to influence behavior, all while generating a better return on investment,” StarTek said in a press release.

StarTek hopes to close the transaction by the end of this month.

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