Why iQor Acquired Jabil’s Aftermarket Services?

Why-iQor-Acquired-Jabil’s-Aftermarket-Services?iQor, a global provider of business process outsourcing services today announced the signing of a definitive agreement to acquire aftermarket services business of Jabil Circuit for $725 million.

This acquisition will help iQor to address the $40 billion market which is inclusive of customer relationship management and product support solutions. iQor was not providing product support solutions before this acquisition but now it can provide after market services by combining its customer relationship management services. The combination of these two complementary businesses will benefit Telmar’s clients.

Presently, iQor provides intelligent customer interactions and outsourcing solutions and has revenues of around $0.5 billion. The company is headquartered in New York City with 17,000 employees in 39 Centers of Excellence around the world. In India, the company has around 1,000 employees and is based in Noida.

Jabil Aftermarket Services is the leading provider of aftermarket services to industry-leading electronics manufacturers, retailers, and service providers in categories such as computing, consumer devices, mobility, networking, storage, telecommunications and medical devices.

The business has 13,000 employees and 28 facilities around the world to serve its global customers. In India the company has around 750 employees and is based in Manesar.

Following completion of the transaction, iQor will have more than $1.5 billion in revenues and more than 31,000 employees and operations in 16 countries around the world. As part of a multi-year contract, iQor Aftermarket Services will become the exclusive aftermarket service provider for Jabil Circuit which will retain a financial stake in the combined company.

Presently, iQor provides four service solutions- Value-Added Customer Care, Contact Center Analytics and Services, IT-Enabled Back Office Processing and Accounts Receivable Management.

With the completion of this acquisition, iQor will have two divisions- business process outsourcing services and aftermarket services and the company will focus on across the customer value chain, from customer care (including sales, technical support, and accounts receivables management) to product diagnostics to repair services.

The business will continue to be run by the current management team and would be headed by Hartmut Liebel, CEO, iQor and has previously served as CEO of Jabil Aftermarket Services during a major growth period. All this will help iQor in going for a smooth integration of Telmar’s Aftermarket services.

iQor provides services to ICT companies like: AT&T, Sprint, Verizon and DirecTV. So, there is possibility that iQor can now provide enhanced Aftermarket services to these companies along with the existing services. And the company can also leverage on Jabil’s large customer base in Aftermarket services.

Financing for the transaction comes from iQor, and an additional investment from its investors, HGGC, The Rohatyn Group, and Starr Investment Holdings. iQor was advised on the transaction by Morgan Stanley, Credit Suisse and GE Capital Markets. It is expected that the transaction is expected to be completed in the the first quarter of 2014 upon regulatory approvals.

For India operations, the change of brand name from Telmar to iQor is expected to happen in FY 2014-15.

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