Archive
By Staff Report
Mar. 10, 2006
As Workforce Management first reported Thursday, the merger between outsourcing advisors TPI and EquaTerra has come undone.
“The parties have agreed to go their separate ways as providers of expert advice related to the information technology and business process operations of their clients,” the companies said in a press release Friday.
Sources say the deal fell apart after Monitor Clipper Partners, the Cambridge, Massachusetts-based venture capital firm that funds TPI, decided to back out.
The merger, which was announced last month, would have created a new company, called Veritage. With 600 employees around the globe, Veritage would have provided advice to employers on outsourcing various business processes, including human resources.
The fact that the merger fell through could pave the way for other sourcing advisers to merge with EquaTerra or TPI, says Phil Fersht, an analyst with NelsonHall & Partners, an HRO consulting firm. Possible acquisition candidates could include Gartner or Everest Group, observers say.
“I think existing clients will largely be unaffected,” Fersht says.
The merger breakdown could actually be a good thing for HR BPO buyers because it leaves them with more advisers to choose from, IDC analyst Lisa Rowan says.
“I can see the advantages of having all of that expertise in one place, but on the other hand there is something to be said for having choice,” she says. “It’s similar to the Oracle-PeopleSoft merger.”
How the two companies will proceed may prove to be interesting given that each company has had a close look at the other’s books, says Jason Corsello, an analyst at Yankee Group.
“They now know the intimate details of each other’s businesses,” Corsello says.
But Michel Janssen, president of supplier solutions at Everest Group, says that all the advisers pretty much know each other’s businesses already. “There really is no special sauce here,” he says.
Schedule, engage, and pay your staff in one system with Workforce.com.