Yellowstone Capital Advisors Announces New Healthcare & Financial Services Client; Sean Butler Joins The Firm

September 10, 2024/in Company News/by Sean Butler

Yellowstone Capital Advisors is excited to announce our newest client, a BPO/CX company specializing in serving the Healthcare, Financial Services, Insurance, Utilities, and Fintech verticals. This new client and our current clients’ recent successful exits have provided our team the opportunity to welcome Sean Butler as a Senior Vice President of the firm. Sean brings a wealth of operating and financial experience to YCAP clients. Sean most recently served as the Chief Financial Officer at VXI and formerly was in assurance and advisory at PwC. Sean’s operator experience further improves the quality of our clients’ business transactions as we continue to deliver successful exits to founders and investors. These developments further solidify YCAP as the leading advisor to mid-market business process outsourcing and customer experience companies.

More about our new client:

YCAP’s advantage is our team’s expertise in customer experience operations, which forms the cornerstone of our investment banking services. Our newest client is an $80+ million provider of customer experience and business process outsourcing services with over 40 clients in the healthcare, financial services, insurance, utilities, and fintech verticals. Our client serves the verticals acquirers are most interested in. If you are interested in acquiring or investing in the BPO or Customer Experience industry, please reach out to our managing director Trevor Allen (tallen@yellowstonecapitaladvisors.com)

More about Sean:

Sean has joined YCAP as Senior Vice President Investment Banking. Previously, Sean held roles as the Chief Financial Officer of VXI Global Solutions, LLC and working at PwC in the Assurance and Advisory practice. At VXI, Sean helped the Company through investments by the Carlyle Group and Bain Capital. After those investments, strategic acquisitions were completed at VXI. Sean also had the Company’s debt rated with Moody’s and S&P in order to help facilitate syndication of acquisition debt. While working in BPO, Sean has a strong focus on operations and driving teams for excellence. Sean’s focus in the Private Client Services practice at PwC allowed him to help founder-led or recently acquired PE backed companies through the audit process. He has held various controllership roles with food service and manufacturing/processing companies during his career with various acquisitions and division divestures during that time. Sean also has experience in client service, accounting, and operational support services. Sean has a Bachelor of Science in Accounting from Loyola Marymount University and is a Certified Public Accountant.

Yellowstone Capital Advisors Announces New Client and is Expanding the Team

March 5, 2024/in Company News/by Samuel Schwartz

Yellowstone Capital Advisors is thrilled to announce our newest client. As we keep the ball rolling in Q1, YCAP is continuing to develop relationships and grow business within the BPO/CX community. This exciting client and our growth have provided our team the opportunity to welcome James McAveeney as an Investment Banking Associate. Additionally, this expansion has opened up a new position for a Director. New team members, like James, allow YCAP to bring a wealth of experience to our business transactions and further solidify our position in the market as M&A advisory leaders in the business process outsourcing and the customer experience industry.

YCAP’s Advantage: The Team

YCAP’s advantage is our team’s expertise in customer experience operations, which forms the cornerstone of our investment banking services. By leveraging our collective knowledge and experience, we consistently deliver the highest quality services to companies operating in the BPO and CX industries.

Looking ahead, we’re committed to expanding our client base and adding talented professionals to our team. Whether you’re a seasoned associate, or director, we’re actively seeking individuals who excel in operations and finance. If you’re interested in being part of our dynamic and fast-paced environment, we’d love to have you join us and our commitment to our clients.

For those eager to work in a start-up environment and join our growing team, we encourage you to reach out to Trevor Allen (tallen@yellowstonecapitaladvisors.com) for more information on potential opportunities at YCAP. Together, let’s continue to elevate client experiences and deliver unparalleled professional services.

Yellowstone Capital Advisors Announces Another Happy Client with the Successful Sale of a leading BPO Company

February 20, 2024/in Company News/by Samuel Schwartz

In Q1 of 2024 Yellowstone Capital Advisors successfully closed a transaction representing a leading United States based BPO provider with nearshore and offshore delivery locations. The company served top brand name clients and enjoys a diversified client base. The process resulted in a high mark valuation for our sellers with twenty-two subscribed buyer NDAs and five offers. Yellowstone Capital Advisors was engaged by the client in October 2023 and closed the transaction early January 2024.

Our Client:

The company is a privately owned United States based provider of business process outsourcing solutions. Our client provides customer care and back-office services for a variety of industries including Travel, Hospitality, E-commerce, Healthcare, and Financial Services. Our client delivers high quality service with their world class nearshore and offshore delivery locations.

The Purchaser:

The acquiring company is a fast-growing privately-owned US business services and technology firm. The company provides diversified business services such as payroll administration, employee benefits, technology services, recruiting services, risk & compliance services, and customer experience services. The acquiring company is backed by one of the leading global private equity firms.

The Transaction:

Yellowstone Capital Advisors was engaged by the seller in early October 2023 to take the company to market and brought the opportunity to our buyer network. Over 90% of contacts with buyers were at the CEO or board levels of the buyers. After receiving five offers, the purchaser ultimately stood out as the best fit with their diversified business and technology services (not a pure play BPO company) and it’s federated operating model allowing our client to continue to operate independently under new strategic ownership. At that point the Yellowstone Capital Advisors team worked closely with our client, the acquiring company, and all third party advisors to manage the due diligence process and ensure the best possible result for our client. Both our client and the acquiring company worked diligently and quickly towards closing the transaction in under five weeks from LOI to closing.

Client references provided upon request.

For information regarding Yellowstone Capital Advisors’ M&A advisory services please email Trevor Allen: tallen@yellowstonecapitaladvisors.com

YCAP Expands Board of Advisors: Gregory Hopkins, Chad Carlson and John Chapman

January 22, 2024/in Company News/by Samuel Schwartz

Expands Board of Advisors: BPO industry veterans join the team

After closing another successful sell-side transaction in January, Yellowstone Capital Advisors expands its board with the addition of three board members that have a combined 70+ years of experience as CEO, CFO, COO and CCO in the CX industry. Our board members have created tremendous success for leading BPO companies such as Alorica, TTEC, Sykes, Sitel, Startek, and ResultsCX.

Yellowstone Capital Advisors’ investment banking services rely on expert customer experience operators to provide the highest quality service for CX companies seeking merger & acquisition transactions. We are humbled to have such a successful group of executives join our team.

Gregory Hopkins:

A 30-year veteran in the CX industry, Greg has served as Chief Client Officer growing existing accounts and strategically adding new ones at TTEC, Stream Global Services (now Concentrix), and Alorica. At TTEC, Greg lead the organization from $700M to well over $1B during his tenure. While at Stream Global Services, he was part of a leadership team that turned the business from negative growth and EBITDA to industry leading numbers in both categories leading to an acquisition by Convergys, which is now Concentrix. Greg is instrumental in helping our sell side clients prepare their book of business for a successful merger or acquisition transaction.

Chad Carlson:

With 30 years of experience in the CX industry, Chad is a successful CEO for public and private companies. Chad was the CEO of Startek while it was purchased by private equity firm Capital Square Partners. Chad was also the CEO of ResultsCX while it was purchased by private equity firm ChrysCapital. Chad was also a COO at ClientLogic when they acquired the public company Sitel to merge into the private company Sitel. Chad’s extensive operating experience helps our sell side clients prepare their organizations for a successful merger or acquisition transaction.

John Chapman:

With 25 years of experience in the CX industry, John is a Charted Accountant and was the CFO of Sykes prior to and through its sale to Foundever. John brings tremendous financial experience to help our sell side clients analyze their financial options and prepare their financial operations for a successful merger or acquisition transaction.

We are so grateful to welcome Greg, Chad, and John to the Yellowstone Capital Advisors team!

For more information on this transaction or regarding M&A advisory services please email tallen@yellowstonecapitaladvisors.com

The time to collect deal flow is now: Buyers and Sellers begin valuation convergence

September 21, 2023/in Company News/by Samuel Schwartz

The M&A market for BPO companies has seen a correction of valuations from last year in the 6.5x – 8.5x EBITDA range to this year in the 5.5x – 7.5x EBITDA range. In our Q3 2023 Market Report we detailed the different valuation expectations between buyers and sellers. However, we are now seeing buyers and sellers get closer to converging their expectations under the current M&A landscape to the pre-covid 2018 – 2019 levels. As buyers that are looking to be active in the market, or sellers that are looking at exit strategies, the time is now to collect deal flow to transact in 2024.

The Dynamic for buyers:

As revenue growth has slowed for major companies in the BPO industry and interest rates have risen, making acquisitions has become an attractive option for growth as company free cash flow remains strong. Although many of the major public BPO companies are trading below 6x Enterprise Value/adjusted EBITDA, the recent upper market transaction comps provide a basic benchmark of their ability to sell at 9.5x – 10x adjusted EBITDA. Due to the two dynamics strategic buyers in the industry are motivated to make transactions and view middle market acquisitions in the 7x-8x range as a reasonable investment.

The Dynamic for sellers:

As the slower growing business volumes begin to affect the middle market companies in BPO, there has been a correction in valuation expectations for sellers. The first phase of this correction involved M&A transactions stalling as buyers and sellers held different valuation expectations. The second phase sellers began to remedy the drop in valuation by chasing increased EBITDA in order to maintain a similar enterprise value total as they were seeing in 2022. However sellers have begun to see that it is increasingly difficult to quickly raise EBITDA operating as a standalone business in an environment where sales volumes growth have slowed industry wide. This dynamic has taken sellers into the final phase of the valuation correction where transactions begin to occur in the 5.5x-7.5x EBITDA range, starting with sellers that are pushed into special situations.

Special Situations:

There is an increased potential for businesses to be pushed into a special situation where an exit becomes necessary. These situations could include businesses with balloon payments on loans from 3-4 years ago at lower interest rates or businesses that are backed by Private Equity firms that have held an asset too long. This month a special situation in the BPO industry led to a sale of a company for a 6x multiple plus an earn-out. As the likelihood increases for these special situations to occur, it becomes pertinent for buyers to collect deal flow and have a prior relationship established.

The time for collecting deal flow is now to transact 2024:

Buyers with strong cash flow are interested in making acquisitions, sellers are adjusting to current M&A BPO valuations, and special situations are becoming more frequent. These recent dynamics point towards the possibility that the gap between buyers and sellers valuation expectations is closing. With an increased likelihood of middle market M&A transactions occurring in the near future, now is the time to begin accumulating deal flow as buyers and creating relationships as sellers in order to transact in 2024.

If you’d like to learn more about the most recent market dynamics, or are interested in M&A advisory services please email tallen@yellowstonecapitaladvisors.com

Two YCAP Team Members Summit Grand Teton

September 11, 2023/in Company News/by Samuel Schwartz

Two members of the Yellowstone Capital Advisors team based out of Jackson Hole, Wyoming successfully climbed the Grand Teton on the last weekend of August 2023. The team often translates the lessons learned in the mountains into their M&A advisory business.

The Grand Teton Trip:

Trip report by Samuel Schwartz, Investment Banking Associate at Yellowstone Capital Advisors

The Grand Teton is a world famous mountaineering objective that overlooks all of Jackson Hole at an elevation of 13,755 feet (4,199 meters). We chose the classic Owen Spalding route to climb to the summit with a total of 17 miles and 7,000 vertical feet of elevation gain. At 5:00 a.m we departed the Lupine Meadows trail head and quickly ascended into the meadows at sunrise. A few hours later we reached the lower saddle (the beginning of technical climbing) and were greeted to 60 mph gusts of wind. Each gust cut through our jackets and chilled us to the bone. All other conditions were lined up perfectly for the ascent. There wasn’t a cloud in the sky, there was few people on the route, and we had plenty of daylight. Regardless of the wind, we pushed forward.

Dressed in every single layer we brought, we both were visibly shivering while climbing to the upper saddle. Rattled mentally from the unrelenting wind, we still hadn’t reached the technical section of the climb. At the upper saddle 5 hours into the day, we broke out all of the climbing gear, while Trevor put his new rope tying skills to work. We quickly made our way across the much anticipated “Belly Roll” and “Crawl” sections that are accompanied by a 2,000 foot vertical drop below. Right as we turned the corner into the Owen Chimney section of the climb the wind shut off and we enjoyed our few moments of calm. We topped out of the Owen Chimney and stashed the rope away. A few moments later the wind picked back up just in time for our final 100 foot ascent.

We moved slowly towards the summit with tired legs, heavy lungs from the altitude, and cold bodies. The last 100 feet took 10 minutes, yet felt like an hour. We reached the summit at 6 hours and 15 minutes into our day. A few pictures on the summit later, we found a notch that sheltered us from the wind and celebrated with a well earned lunch.

The way down turned from bone chilling freezing to the highest late summer heat. Every step down the trail became easier as the elevation decreased and our mental states came back to normal. We jogged down the last 4 miles of the trail and were surprised by our rejuvenated energy. We sprinted the last few hundred feet to the Lupine Meadows trailhead to finish the challenging day in style with a round trip time of 11 hours and 30 minutes.

Lessons for M&A transactions:

Every big objective must be done one step at a time

Embarking on a M&A transaction is a massive undertaking, similar to a 17 mile & 7,000 vertical foot mountaineering route. Both are adventures that require navigating through circumstances that are often out of your control. The most important part of the M&A process is to be focused on the task at hand that you can control. The YCAP team takes every step of the M&A journey seriously to provide the best possible end result, rather than just looking at the top of the mountain at the technical crux.

2. When trouble arises, make an honest assessment

During an M&A transaction, like any good adventure, there are unpredictable items that inevitably arise. At YCAP, we’ve learned it’s best to expect the unexpected and use an honest assessment in order to move forward. When making a decision we look at all the factors that come into play and detach from the situation to remove emotions. Similar to being hit by unexpected winds on an otherwise perfect day, M&A transactions have unexpected obstacles that occur. Hiring investment bankers like YCAP gives you a group of people on your team who are experts at looking at the big picture of a transaction, rather than getting bogged down by the challenge of the moment.

3. The final push can be the hardest, but the most worthwhile

Climbing the last 300 vertical feet of the Grand Teton took us 1 hour and 30 minutes. The final push in an M&A transaction can be both physically and emotionally draining. The last few steps of an M&A process carry the weight of the entire journey. Getting the job through the finish line requires dedication, patience, calculated decision making, and grit. The YCAP team always puts their best efforts forward at the end of the deal to ensure all parties get the best outcome.

4. Take a moment to enjoy

M&A transactions are exceptionally busy times for the companies involved. For the seller (and for strategic acquirers the buyer as well) they must continue to operate their business, while working towards completing the transaction. M&A transactions can feel like that unrelenting wind. Eventually you’ll turn the corner to get a moment of rest, or reach the summit. Take the time out to enjoy these well earned moments.

Yellowstone Capital Advisors Closes Transaction: $80M BPO firm acquired by $1B BPO firm

June 5, 2023/in Company News/by Samuel Schwartz

In Q1 of 2023 Yellowstone Capital Advisors successfully closed a transaction representing a leading US based BPO provider in an asset purchase agreement by a $1B US based BPO firm.

Our Client:

The company is a privately owned U.S based provider of contact center solutions with a high social impact alongside reliable domestic operations. Call center operations are developed in under resourced areas providing critical jobs to these communities while also tapping into underutilized human talent for clients. Our client delivers customer care solutions for 5 companies in the Fortune 15 and other leading global brands in the healthcare, telecommunications, insurance, and technology industries.

The Purchaser:

The company is a privately owned BPO leader in customer service, customer experience, and digital transformations. Globally the company employs over 40,000 people throughout more than 42 locations. The purchaser is committed to carrying forward with our client’s spirit using a dual mission: provide exceptional customer care while serving as a catalyst for economic growth and social impact.

The Transaction:

Using their team of experienced BPO operators, Yellowstone Capital Advisors (YCAP) played a major role in creating the initial relationship to begin the transaction. The YCAP team created an initial pool of buyers for the transaction, with our client ultimately selling to a buyer within our network.

Being intimately familiar with the operations and financials of their client, the YCAP team built a BPO specific business use case that kick started the purchaser’s interest in a transaction. From that point forward the YCAP team worked vigorously to manage the due diligence process, help negotiate lease changes, and ensure the best possible results for both parties. The Yellowstone Capital Advisors team is thrilled about the outcome that adds our client to the purchaser’s family, further supporting their people first cultural mission.

For more information on this transaction or regarding M&A advisory services please email tallen@yellowstonecapitaladvisors.com

The Year of Free Cash Flow Acquisitions: Strong Selling Opportunities for Companies Under $150M

April 27, 2023/in Company News/by Samuel Schwartz

In March of 2023, Yellowstone Capital Advisors successfully closed a transaction representing a $100M BPO business, selling to a $1B BPO business. This transaction highlighted an important dynamic in the market now and in the near term future. Large strategic BPO businesses are looking to make acquisitions of companies under $150M in revenue.

2023 Market Dynamic:

Due to the macro economic conditions in 2023 involving high interest rate loans, the capital markets have become much less attractive to buyers. Private equity firms and large strategic BPO firms have become less interested in taking on debt in order to finance a transaction. Generally strategic buyers making over $1B a year in revenues actively seek transactions in the $100M-$400M range in order to grow the business. Rather than take on debt, these strategic buyers are seeking to purchase companies directly out of their free cash flow.

Opportunity for $30M to $150M Companies

This market dynamic has led large strategic BPO businesses to make smaller acquisitions of companies with revenues from $30M to $150M. While the current macro economic conditions exist, there is a valuable selling opportunity for companies in this revenue range. These strategic buyers often pay higher valuation multiples and have the organizational resources to continue on a growth trajectory through harsher economic times.

To learn more about these market dynamics or begin looking into a sale of your company please click here to schedule a meeting.

Yellowstone Capital Advisors creates proprietary BPO/CX industry database

January 26, 2023/in Company News/by Samuel Schwartz

Yellowstone Capital Advisors (YCAP) was created by Managing Director, Trevor Allen with a mission to create a specialized investment banking service for the Customer Experience, Business Process Outsourcing, and Logistics & Fulfillment industries. The firm is a team of operations specialists that have developed expertise from within these industries. They provide an investment banking service from experienced industry insiders, not just a third-party company making a transaction.

BPO/CX Industry Database

Yellowstone Capital Advisors was created to exclusively serve the Business Process Outsourcing and Customer Experience industries. With a clear mission in mind the company built a proprietary database for the BPO and CX industry. The database currently holds more than 300 companies and is growing at a rate of 20 companies per week. The database serves multiple purposes to both our buy-side and sell-side clients.

Buy-side clients working with our buy-side specialist team, Growth Acquired, get a unique look at the market that fits directly in line with their growth strategy. In addition buy-side clients have the opportunity to uncover off market deals that would otherwise go unnoticed by traditional investment bankers. Yellowstone Capital Advisors meets with approximately 20 companies in the database each month, keeping a rigorous view of the market at all times.

Sell-side clients get an up to date view on the BPO/CX industry specific marketplace. Our clients and database participants get the advantage of understanding deeper market dynamics. The database allows Yellowstone Capital Advisors to put sell-side clients in the best position to maximize their value and decrease the time required to finalize a transaction.

How to get added to the database?

If your company is interested in being added to the database please contact us here.

If your company is interested in buy-side representation with access to the database please contact us here.

Yellowstone Capital Advisors Announces New Client and Expansion of the Team

January 19, 2023/in Company News/by Yellowstone Capital Advisors

Yellowstone Capital Advisors (YCAP) was created by Managing Director, Trevor Allen with a mission to create a specialized investment banking service for the Customer Experience, Business Process Outsourcing, and Logistics & Fulfillment industries. The firm is a team of operations specialists that have developed expertise from within these industries. They provide an investment banking service from experienced industry insiders, not just a third-party company making a transaction.

Yellowstone Capital Advisors engaged by $100M BPO Company

Yellowstone Capital Advisors, a speciality M&A advisory firm, whose Managing Director is fully licensed by FINRA and the SEC, was engaged by a $100M BPO company as a sell-side client. Using their 20 years of industry knowledge, Yellowstone Capital Advisors has created multiple unique opportunities to provide the best outcome for their client.

Made key hires to grow the team

Yellowstone Capital Advisors has added three new members to the team. An Investment Banking Associate, Investment Banking Analyst and a BPO Pricing Specialist. The new members on the team all have operational experience in the BPO industry or entrepreneurial experience in addition to their finance oriented skill sets.

To complement the sell-side team, the firm has also started a buy-side specialty team under the name Growth Acquired. Growth Acquired helps established companies develop effective M&A strategy including off-market deals from our proprietary database and facilitates the completion of transactions. The proprietary database currently contains over 350 mid sized companies within the BPO and CX industry and is constantly growing.

BPO/CX Industry Database

How to get added to the database?

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