A partner in actions” exit from business process outsourcing (BPO) and customer relationship management company OneLink Fund announced last week recorded about 5 times the investment of the private equity firm. Chairman and CEO Greg Belinfanti tell Mergers and Acquisitions how his fund achieved victory by executing an organic growth strategy.
“We wanted customers in higher growth technology companies,” says Belinfanti. OneLink, a call center answering inquiries in Spanish for other companies, had a very concentrated client list when One Equity invested.
“The nature of the growth of these companies means that they value our services more as an extension of their customer acquisition engine and pay better. We wanted to grow with these companies ”, explains Belinfanti. “Honestly, it has become a case where success breeds success: we have obtained Lyft then a game company called Supercell, Free market, the eBay from Latam, and Rappi, the Uber eats in Latam. With every new economy customer we got, the rest looked at us and said, “OneLink knows how to meet our demographics because it’s a high growth company too. “
OneLink’s initial appeal was based on its culture as well as its focus on a high-growth segment of the customer relationship management market, says Belinfanti. Employees at the Latin America-based holding company’s call center receive English lessons to broaden their skills and have worked on campuses with amenities unmatched by the competition: on-site sports facilities, periodic movie nights for families, cafeteria invites relatives of employees to sell-place. The moves led to a 40% lower attrition rate than OneLink peers.
These cultural attractions have taken on increased importance given One Equity’s thesis on OneLink’s main markets.
“We spent a lot of time studying the BPO and customer experience industry, and we thought Latam’s nearshoring in the US was going to become more and more important,” Belinfanti says. “A demographic shift is happening in the United States. It is clear to us that we will need more Spanish speaking and bilingual agents. And Latam’s tech and phone capabilities have grown significantly, making it more competitive with places like the Philippines and India with much less travel. “
The profitability of OneLink’s nearshore offerings and revenue growth created a significant exit opportunity: to sell to strategic Online help arrived at a double-digit multiple of earnings before interest, depreciation and amortization, and represents an internal rate of return of 65% according to a source familiar with the matter.
This return is all the more convincing since it was driven by organic growth, a break with the usual strategy of buying and building One Equity.
“The biggest obstacle to acquisitions was managing bandwidth,” says Belinfanti. “The business is growing so rapidly that diluting management’s focus on acquisitions didn’t make as much sense as we were seeing [strong] organic growth. At One Equity Partners, we tend to focus on acquisitions, but given the growth model, we decided that the best use of resources was to double organic growth.
Current portfolio company ResultsCX should continue to benefit from the same tailwinds, Belinfanti notes. As US companies seek additional call center capacity closer to home, this market could continue to generate strong returns.