Tuesday, March 15, 2011

SourceCorp Merging With HOV Services

SourceCorp, which began life as a document imaging service bureau roll-up, has entered into an agreement to merge with HOV Services. HOV Services is an India-based document services outsourcing specialist that acquired SourceCorp competitor Lason back in 2007. Back in the late 1990s, Lason and SourceCorp (then known as FYI) engaged in a bit of a bidding war for service bureaus. SourceCorp, which was founded by executives from outside our industry, took a more fiscally responsible to the roll-up. I remember a conversation with a few SourceCorp execs at AIIM 1998, who accurately predicted the impending fall of Lason - which actually had three ex-execs go to jail for stock fraud, or something along those lines.

Lason was eventually bought by the investment group Charterhouse for something like $25 milllion and some assumed debt. Charterhouse, which also had an investment in document capture ISV Top Image Systems, then flipped Lason for $148 million to HOV three years later. At the time, the combined company was estimated to have more than $200 million in annual revenue. SourceCorp, which reported revenue of greater than $400 million in 2005 as a public company, was sold to the investment firm Apollo Management in 2006 for $475 million. I thought SourceCorp had dispersed some of its businesses since then to narrow its focus, but we'll estimate that the new HOV/SourceCorp entity is worth at least $500 million annually. Definitely an interesting starting point for a BPO business.

4 comments:

Anonymous said...

What are your thoughts on this "new" entity being merged; being that the HOV president is over the BPO side? Its apparent the the HOV president will have more control over what happens to the BPO department as a whole. It is not really clear on the control that Ed Bowman will have, if any on the BPO side.

DIReditor said...

The way I read it is that the HOV president will report to Bowman. I don't know that there is any busiess aside from BPO. Maybe I am wrong on this.

Anonymous said...

Sourcecorp has 5 divisions, the BPS group is just one of them.

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