Support services and business process outsourcing giant Serco has acquired rival Vertex Public Sector for £55.5 million in a bid to bolster its UK government portfolio, where it will now have access to central and local government customers.
The Vertex deal will add 3,000 employees to Serco's UK BPO business, with specialist focus on multi-channel customer service as well as shared transactional services and ICT services. It will also boost Serco's capabilities in areas such as HR and payroll, revenues and benefits, case management and administration services.
"This acquisition enhances the range of services we offer to the UK public sector as they seek to reduce costs whilst continuously improving outcomes for citizens," said Christopher Hyman, chief executive of Serco Group.
He added: "We are pleased with the important customer relationships it brings and the opportunity to extend and expand these. The newly added skills and capabilities will also help Serco address future prospects in both the local authority and central government markets."
Research director at analyst firm TechMarketView, John O'Brien said that the deal will add £110 million in public sector business to Serco's books and will lead it to 'jump several places' in TechMarketView's Business Process Services rankings next year to become one of the top five suppliers.
"Serco [gets] its hands on Vertex's flagship local government BPO contracts at Thurrock and Westminster councils, which are two of the largest local government BPO deals in the markets, as well as smaller central government contracts at the Child Maintenance and Enforcement Commission and Job Centre Plus," said O'Brien.
"Serco expects to be able to now provide additional services into existing local government customers, and give it the scope to win further 'wide-ranging strategic partnerships'."
The deal also means that Vertex now has no remaining business in the UK, following Capita's acquisition of its private sector operations for £40.5 million cash in September last year.