Sitel Acquires SYKES: Another Milestone Acquisition as CX Industry Competition Intensifies


Joining the bandwagon of large-scale acquisitions in the contact center and customer experience (CX) industry, Sitel recently announced the acquisition of one of its competitors – U.S.-based contact center provider SYKES. With this announcement, Sitel further demonstrates its commitment to scaling its services and expanding as a global leader. The newly merged companies will allow Sitel to offer a broad portfolio of CX solutions to its clients.

The contact center industry has witnessed several large-scale and strategic acquisitions in the recent past. Some noteworthy examples are Concentrix-Convergys, Teleperformance-Intelenet, Startek-Aegis and Infosys-Eishtec. These acquisitions were aimed at expanding vertical capabilities, digital portfolios or geographical reach.

Sitel has announced it will acquire SYKES in an all-cash transaction, valued at around US$2.2 billion. It says the magnitude of this deal will result in a combined revenue of over US$4 billion. With this acquisition, Sitel joins the league of leading conglomerates in the contact center services industry. In one of the recent analyst briefings conducted with ISG stakeholders, Sitel shared its vision to scale operations, with M&A as a key area of focus for business growth. The recent ISG Provider Lens™ Report on Contact Center Outsourcing found Sitel to be one of the dominant leaders in the contact center industry, and the acquisition of SYKES will further strengthen its position as the leader of CX.

ISG expects three definitive outcomes from this acquisition that will help secure Sitel’s position in the CX space:

  1. Scale

    In addition to expecting a boost in overall revenue, Sitel will be onboarding 150,000 SYKES employees, bringing its headcount beyond 250,000. Both Sitel and SYKES have adopted the work-from-home model, and the merger will enable both companies to leverage existing solutions such as Sitel MAXhub and SykesHOME infrastructure to extend the work-from-home model to its agents and clients.

  2. Geographic expansion

    Although Sitel has more than 100 delivery centers around the world, the acquisition will add another 100+ delivery centers to its portfolio, enabling it to expand its global footprint and deliver to clients across geographies. Currently, Sitel has a reasonably large presence in Europe, whereas SYKES derives nearly 81 percent of its revenue from the Americas. SYKES recently invested in expanding its footprint in LATAM, including El Salvador and Costa Rica, where the latter is also the base for a significant number of its employees. Thus, this deal will give a competitive edge to Sitel in the Americas and enable it to tap the growing LATAM market, where only a few global providers have a strong foothold.

  3. Technological synergies
    Sitel consolidated its solutions to launch its flagship and comprehensive CX suite, EXP+TM. The company believes the SYKES acquisition and expanded client base will provide opportunities to accelerate the implementation of this solution across regions. Also complementing Sitel’s existing digital capability is SYKES’ automation suite, which it expanded with the acquisition of Symphony and significant investments in AI. This will complement Sitel’s digital experience services with the addition of digital operations and process automation capabilities.

By expanding its capabilities and expanding its geographic presence, Sitel is clearly making steps to scale operations, but the move also brings with it the complexity of integration. Generally, with an acquisition of this size, consolidating services and new capabilities takes a significant amount of time. We have seen several instances in which companies have failed to integrate post-acquisition and sent mixed messages to clients.

In the coming months, Sitel must work toward conveying a unified message to all its existing and potential clients. Attrition is not new to the contact center industry, and with this acquisition, attrition in the form of the departure of key personnel could be a risk that clients must consider. Sitel has always emphasized people, empathy and culture. It must continue to prioritize these values and bring together the two firms to jointly pursue new clients. Since this is a large-scale acquisition, integration of services and solutions will need a lot of attention, with considerable focus on planning and time to ensure it is successful, so clients can reap the benefits.

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About the authors

Namratha Dharshan

Namratha Dharshan is director and principal analyst for ISG. With more than 16 years of experience in IT/BPO outsourcing research, she has developed expertise in business processing outsourcing and customer experience broadly focused on horizontals such as finance and accounting and contact center. Her research focuses specifically on customer experience as it relates to digital transformation, omnichannel, analytics, AI and automation.

Mrinal Rai

Mrinal Rai is the principal analyst for Digital Workplace and Conversational AI. His area of expertise is digital workplace services, enterprise social collaboration and conversational AI both from a technology and business point of view. He covers key areas around the Workplace, End User computing domain and conversational AI viz., modernizing workplace, Enterprise mobility, BYOD, VDI, managed workplace services, service desk, enterprise social software, content/ team collaboration, chatbots and intelligent virtual agent platforms. He has been with ISG for last 8+ years and has more than 13 years of industry experience. Mrinal works with ISG advisors and clients in engagements related to chatbots, virtual assistants, workplace modernization, social intranet, collaborative workplace, cloud-based VDI, end user computing and service desk.