Widespread Interest in BPO From Private Equity

Kohlberg Kravis Roberts-owned NorthgateArinso has entered into an agreement to acquire the Human Resources Management Unit of Convergys (NYSE: CVG) for $100 million. It is structured with $85 million up front and $15 million in cash over the next three years.The addition will significantly strengthen NorthgateArinso's position in the U.S., a market it has not had a strong presence in until now. NorthgateArinso is a global human resources software and services provider.

Private equity firms have invested in 64 other Business Process Outsourcing companies in the past two years according to the PitchBook Platform. The biggest investment was made by Ares Management with its $308 million acquisition of Stream International in 2008. The median buyout amount for the industry was $147.95 million. 56 different private equity firms have made investments in the sector, led by The ComVest Group with three investments, showing the widespread interest in the sector by the private equity industry.