Overview:
On 22 November 2021, Concentrix announced the acquisition of PK, a US-based digital design and engineering company for $1.6bn.
PK significantly enhances Concentrix’s CX digital transformation capabilities and bolsters its presence in the rapidly-growing $270bn digital IT services market.
PK’s complementary expertise and client base provides significant cross-sell opportunities to Concentrix for accelerating its revenue growth and further expanding its addressable market.
About Concentrix:
Founded in 2009, Concentrix is a global provider of customer experience (CX) services and technologies with over 270,000 employees and presence in over 40 countries worldwide. Concentrix expects to record $5.6bn revenue in 2021.
It provides experience design & mobility, marketing, digital self-service, cloud, automation, systems integration, customer engagement, analytics and workplace collaboration services.
Based in Fremont, CA, Concentrix has over 750 enterprise clients which includes over 100 Fortune 500 companies.
About PK:
Founded in 2004, PK is a digital design and engineering company backed by The Carlyle Group.
It provides services for strategy & design, digital engineering, cloud engineering, data & analytics, automation & operation and digital experience platforms.
PK has partnerships with over 20 leading platforms including Adobe, Google, Microsoft, Salesforce, UiPath, AWS, ServiceNow and Sitecore.
Headquartered in Omaha, NE, PK has over 5,000 employees based in 20 cities across 4 countries.
Rationale of the transaction:
PK expects to record $530m revenue and $85m adjusted EBITDA in its first full year following the acquisition. This represents an EV / Revenue multiple of 3.0x and EV / EBITDA multiple of 18.5x at an enterprise value of $1.6bn.
PK expands Concentrix’s client base by adding several Fortune 250 companies which account for 80% of the company’s revenue.
PK’s global delivery model and differentiated CX-driven capabilities will help Concentrix accelerate growth within core and adjacent markets and provide multiple opportunities to drive margin expansion.
Concentrix will be able to build more complex digital engagements with the combination of the best of digital CX solutions and services from both companies.
The transaction is expected to close in Q1 2022.
The Chesapeake Group was not an advisor in this transaction.