ACS: Europe Awaits

(By Philip Carnelley, Fri 10 Aug 2009, 10:15) We have been keeping a closer eye on Affiiliated Computer Services (ACS), the major US BPO and ITO player, since its purchase of Syan back in January (see Goodbye Syan. What does this mean for ITO to SMEs?). We heard, for instance, that it is aiming to grow significantly in Europe, aiming for $1.5bn (c£1bn) by 2012. It then went on to buy Anix, in June (see Xploite sells Anix. Who next?) adding another $70m to its UK revenues (proforma – trailing twelve months). Thus we had a good look at its annual results last night, for any implications for the UK market. Overall, the company reported revenue growth of 6%, to $6.5bn, and maintained its operating margin rock-steady at 10.5%. Around 3pp of the revenue increase ($200m) was due to acquisitions. Its Q4 pipeline was said to be 87% BPO, 13% ITO, and around 55:45 commercial to government work.

However, there wasn’t a whole lot we didn’t already know: almost nothing about the UK or Europe in the official release and in particular, no revenue segmentation. On the conference call, Tom Blodgett, COO-Commercial, re-affirmed the company’s intent to grow internationally: Over the last 18 months, ACS has made five acquisitions, in Germany, Latin America, the Caribbean and (as we know) two in the UK. These acquisitions added about 10,000 employees and $290 million in annual revenue. He said that “this expansion helps to increase our presence in these local markets and allows us to provide additional services to our multi-national clients. Our M&A pipeline includes international acquisitions that will further expand our global footprint including Eastern Europe and Asia.”

He also mentioned the Anix acquisition specifically, pointing out the new access to the local government market as well as increased sales and management capability. So that’s it for now. We await further announcements.