After acquisitions, IPVG now focuses on growing BPO business
By Lawrence Casiraya
INQUIRER.net
First Posted 18:51:00 05/17/2008
Filed Under: Economy, Business & Finance
MANILA, Philippines -- IPVG Corp. is targeting "organic" growth in the business process outsourcing (BPO) sector following a spate of acquisitions in the first quarter.
The publicly listed firm announced P828 million in first quarter revenues, 60 percent of which was pumped in by its BPO business including subsidiaries IP-Contact Center Outsourcing and Influent.
IPVG acquired in March a majority 70-percent stake in Influent, a US-based call center operator with offshore sites in Panama and the Philippines. IP-CCO, meanwhile, resulted from the acquisition of another US operator called Global Stride in 2005.
IPVG's BPO business now has a combined capacity of some 2,000 seats, according to chief executive Enrique Gonzalez.
Though raking in more than half of total revenues, the BPO business posted the lowest profit margins, lower than IPVG's two other major business lines: communications and gaming.
Gonzalez, however, attributed this to IPVG's heightened expansion and integration efforts in the previous quarter. He expects better margins in the succeeding quarters as "operational efficiencies" take effect.
"When you're expanding this fast, the company incurs expenses," he said in an interview at the sidelines of IPVG's first-quarter investor briefing. "BPO will always be our cash cow because it has the scale and volume."
With the addition of Influent, IPVG's BPO operations now cover eight countries. Asked about future acquisitions, Gonzalez said the company will instead focus on organic growth but will be "selectively" looking at investments for added services or geographical coverage.
In February, IPVG offered to buy US call center operator People Support for around $350 million but was rejected.
"This is a customer-driven market. But right now, we are more than happy to talk to clients and work on winning more bids," Gonzalez said.
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