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Merger between Majorel and Sitel. A project now stalled

Sitel Group and Majorel announced with great fanfare on June 20 that they had reached an agreement setting the main outlines of a major merger intended to create a new world leader in customer experience. A rapprochement which, as things stand, has been interrupted.

In a press release published on the website of Majorel Group on September 19, the global provider of end-to-end customer experience solutions announced, together with its main shareholders Bertelsmann and the Moroccan Saham, that it had ended discussions with Sitel Group and Sitel’s majority shareholder, namely the Mulliez family, regarding this possible merger.

“A decision which follows intensive efforts to carry out the operation. The fact remains that, despite completed due diligence (i.e. all the checks carried out by an investor with a view to a transaction, editor’s note) and validated synergies between the two companies, the alignment does not could not be reached on the final structure of the transaction in the context of the current macroeconomic environment,” Majorel said in a statement.

Read also | Sitel and Majorel agree on the key terms of a proposed merger

An aborted merger that Thomas Mackenbrock, CEO of Majorel, commented as follows: “Majorel’s deep customer experience expertise, passionate global team members, operational excellence and strong financial position form the basis for being a trusted, long-term partner for many of the world’s most respected brands.”

And the boss of Majorel to continue: “we look to the future with confidence, supported by our solid balance sheet, our positive net cash, our solid half-year results and our strengthened forecasts for the whole of the year. We will continue to leverage our momentum to deliver positive results for our clients, our team members, our shareholders and the local communities where we operate,” end of quote.

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For his part, Laurent Uberti, CEO and co-founder of Sitel Group said: “Our figures for the 1st half of 2022 once again demonstrate our resilience in these difficult times, with double-digit revenue growth compared to the 1st half of 2021 and around 315 million euros of IFRS EBITDA, i.e. 17% of revenue (+30% compared to the 1st half of 2021).

And to continue: “as we look to the future, we remain determined to support our customers in their adaptation to the challenges of digital transformation and to deliver a flexible service, covering all their needs in the service of the consumer experience, an essential element to their competitiveness in their markets.

According to our colleagues from Forbes, this aborted merger would find its origin because of “disagreements on the alignment of the financial strategy”. Indeed, still according to the magazine reporting behind the scenes of this merger, a “financial asymmetry of the debt capacity between the two companies”, would have been detected. Concretely, one of the two parties would be indebted, unlike the other not, thus impacting the chances of success of this merger.

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Among the attempts at explanation, and still according to our colleagues from Forbes magazine, Sitel “would have financed a previous external growth operation; in this case the takeover in 2021 of the American Sykes Enterprises, one of the main global outsourcers, using 100% of the debt”.

The fact is that “the English bank which would have advised Sitel on this operation would have negotiated this loan at a variable rate. However, since the outbreak of the Ukrainian crisis, rates have naturally soared. What weigh in particular on the balance sheet of the new group, which would modify their financial modeling and would reduce the effect of the projected synergies ”. To be continued !




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