WHEELING & DEALING
On The Move
By Jean-Marc Levy

First published in HRO Today (October 2003)
 

The relocation industry is barreling down the road to change.

In the lackluster deal-making climate of the last twelve to twenty-four months, the relocation services segment of the HR Outsourcing industry has been bustling with activity.

On the surface, one could think of the relocation services industry as a fairly mature industry segment. According to the 21st Annual Profile of the Relocation Administrator, published by relocation consultant Runzheimer International, the key areas of responsibility of relocation administrators continue to be to develop, communicate and administer relocation policies, to negotiate contracts with vendors, and to plan and manage corporate group moves. The only noticeable change for the industry over the past several years has been the increased focus on cost management tools and services –
in headier employment market days, the focus of relocation services firms was on keeping relocated employees happy and making their relocation experience as painless as possible; their focus is now squarely placed on managing costs for their corporate customers.

More careful observers of merger and strategic alliance activity, however, have been picking up on the tell-tale signs and characteristics of a rapidly changing industry, with an increase in deal activity focused on consolidation, globalization, specialization, and the application of new technologies.

The following sampler of 2003 mergers, acquisitions, and strategic alliances in the relocation services segment is fairly representative.

• Exult, the leading provider of integrated HR Business Process Outsourcing to Global 500 signed an agreement with ReloAction, a global provider of personalized corporate relocation services, allowing Exult to add employee relocation services to its service offering. ReloAction has already started providing relocation services to BP, one of Exult’s major clients.

• Weichert Relocation Company and Resources International (RRI) announced that they would be merging their operations, creating a combined company with 550 employees and managing more than 25,000 relocating employees for approximately 400 clients, instantly becoming the third largest relocation firm (as measured by numbers of employees served) behind Prudential and Cendant.

• Prudential, in the meantime, expanded its product offering through a strategic relationship with SeniorBridge Family, a leading provider of eldercare services, and is now offering a series of services targeted at homeowners who need to relocate with older adults.

• Software development and consulting services firms Hessel Group and Orion Software Solutions combined some key software and consulting assets to form Orion Mobility, a new business offering integrated relocation software solution as well as expense management and tax gross-up services to corporate relocation clients.

• SIRVA, a portfolio company of buyout giant Clayton, Dubilier & Rice and one of the largest global relocation and moving services company, continued to strengthen its worldwide position by acquiring Scandinavia-based Scanvan from Swedish private equity firm Procuritas. Scanvan joins the ranks of leading SIRVA brands such as Allied Van Lines, northAmerican Van Lines, Global Van Lines, and Pickfords.

NOTABLE TRANSACTIONS UPDATE

Earlier this year, in one of my columns, I introduced Livewire Logic, a provider of web-based intelligent virtual agents offering cost-effective online customer service through interactive text-based conversations. At the time, I speculated that a speech-based solution would be the next step in the transformation of CRM and customer service outsourced solutions.

A few months ago, investors Sevin Rosen, Solstice Capital, and TD Capital Technology Ventures seemed to agree and invested $7.5 million in a series A round into Unveil Technologies, a provider of voice and text-based customer service solutions, and the winner of Call Center Magazine’s 2003 Product of the Year Award.