Convergys, based in Cincinnati, agreed Monday to buy rival call center giant Stream Global Services for $820 million.
The purchase of Stream, based in Minnesota, gives Convergys, which has 80,000 employees, another 40,000 to 45,000 workers. It increases the number of call centers to 135 and allows Convergys to serve clients in 35 languages, according to Convergys CEO Andrea Ayers.
The merger will create a mammoth call center company with 125,000 employees in 25 countries. The combined company is expected to have $3 billion in revenue, making it the second largest provider of customer management services in the world.
Company officials said they will finance the transaction mostly with $400 million cash on hand and a $350 million loan from Citigroup Global Markets Inc. and Bank of America Merrill Lynch.
In a statement, officials at both companies said the deal will diversify the combined companys client base, extend its geographic reach around the world, add more employees with diverse language skills and add profit potential over the long haul.
The deal makes sense, says Ayers, because the companies complement one another in terms of clients, location and skill sets. Stream works largely with corporate clients that conduct business in Europe, Asia, the Middle East and Africa. The company expects the deal to add about 35 cents in diluted earnings per share in the first year.
Ayers said the merger should help long-term prospects because the combined companies strengthen Convergys by diversifying our client base and enabling us to offer a wider range of customer transactions.
She said Streams expertise in technical support services will strengthen Convergys position in the technology industry and help the company expand its client base.