Teleperformance Acquires PSG Global Solutions

By acquiring US-based PSG Global Solutions, a leader in digital recruitment process outsourcing (“RPO”), Teleperformance will further strengthen its strong added-value Specialized Services activities, its major position in the dynamic US healthcare vertical and its digital recruitment practices. The deal will create immediate value for Teleperformance shareholders as it is expected to be accretive to EBITDA margin and earnings per share in 2022 on a proforma basis.

Regulatory News:

Teleperformance (Paris:TEP), the global leader in outsourced customer and citizen experience management and related digital services, announced today that it has acquired PSG Global Solutions, LLC (“PSG”) from its management and private investors. PSG is a US-based leader in partial cycle recruitment process outsourcing (“RPO”), offering solutions for key aspects of the recruiting and recruiting support processes. PSG will be a wholly-owned subsidiary of Teleperformance, with its founders and senior management team continuing to operate the company and covering the RPO market for the Group.

Founded in 2008 and headquartered in Marina del Rey, California, PSG is a high growth, profitable, and strong cash generative company, with annual revenue of US$75 million and an annual revenue growth of c.+40% (2019-2022E CAGR).

PSG’s unique comprehensive solution suite, supporting its clients’ hiring activities, is composed of three business lines:

- Recruiting: providing dedicated specialists for sourcing, screening and vetting candidates to be interviewed by its clients’ recruiting teams

- Recruiting support: delivering a broad range of administrative support covering pre-recruiting, recruiting and post-recruiting workstreams, including credentialing, clinical referencing, onboarding, payroll and billing; it helps clients focus on core value-added decisions

- Full cycle RPO: offering a comprehensive solution from job posting to candidate onboarding, outsourcing the entire function for clients

PSG has a strong and niche business model that creates significant value for its clients, driven by its digital integrated business service delivery. PSG’s proprietary technology platform (Compass) and people are integrated from the ground up with automation at critical stages of the recruitment funnel (sourcing & candidate attraction, recruiting support, analytics & reporting).

This acquisition is fully aligned with Teleperformance’s stated strategy of building deeper expertise along its adjacent lines of business, industry verticals and digital capabilities. By acquiring PSG, Teleperformance further strengthens its strong added-value Specialized Services activities, its major position in the dynamic US healthcare vertical and its digital recruitment practices. The Group intends to scale up PSG’s RPO activity in new client verticals and new geographies. The performance of PSG’s digital platform built around proprietary solutions optimizes the recruitment of talent and represents a real competitive asset. The deal creates immediate value for Teleperformance shareholders as it is expected to be accretive to EBITDA margin and earnings per share in 2022E on a proforma basis.

The consideration for the transaction (enterprise value) is US$300 million at closing. The acquisition is fully financed with cash on hand. Latham & Watkins LLP acted as legal advisors to Teleperformance.

Teleperformance Chairman and Chief Executive Officer Daniel Julien, said: “PSG delivers critical recruitment services to a large array of blue chip clients, mostly in diverse recession resilient end-markets in the United States. It is a solid organization that supports more than 110 clients with a sophisticated growing workforce of approximately 4,000 employees.

Being integrated in Teleperformance’s Specialized Services activities led by Scott Klein, this acquisition will reinforce the Group’s global leadership as a provider of digital integrated business services.

Together with PSG’s experienced and entrepreneurial management team and its premier proprietary technology capabilities, we will continue to strengthen our solid position in the US healthcare end-market and our digital recruitment processes. This represents a significant competitive advantage in the current challenging hiring context.”

“The deal creates immediate value for Teleperformance shareholders as it is expected to be accretive to EBITDA margin by c.15bps and earnings per share by nearly +3%**”, he added.

Scott W. Klein, President of Specialized Services, Teleperformance, commented: “The value that PSG creates for its clients is unmatched in the RPO industry. Our ability to invest in this newest Specialized Services business will drive enhanced growth and new solutions and allow for the achievement of our never-ending focus on delivering total and complete client satisfaction! Together with PSG’s management team, we notably intend to scale up the RPO activity in new client verticals and new geographies. The performance of the digital platform built around proprietary solutions optimizes the recruitment of talent and represents a real competitive asset.”

** excluding amortization of intangibles on a pro forma basis for 2022

Conference call with analysts and investors

A conference call to discuss details of the transaction will be held today at 6:15 pm CEST.

Dial-in-number:

France: +33 (0) 1 70 37 71 66

United Kingdom: +44 (0) 33 0551 0200

USA: +1 212 999 6659

The slides of the conference call and the recording will be available on the following link:

https://www.teleperformance.com/en-us/investors/publications-and-events/other-events/

Indicative investor calendar

Third-quarter 2022 revenue: November 3, 2022

About Teleperformance Group

Teleperformance (TEP – ISIN: FR0000051807 – Reuters: TEPRF.PA - Bloomberg: TEP FP), the global leader in outsourced customer and citizen experience management and related digital services, serves as a strategic partner to the world’s largest companies in many industries. It offers a One Office support services model including end-to-end digital solutions, which guarantee successful customer interaction and optimized business processes, anchored in a unique, comprehensive high touch, high tech approach. Nearly 420,000 employees, based in 88 countries, support billions of connections every year in over 265 languages and around 170 markets, in a shared commitment to excellence as part of the “Simpler, Faster, Safer” process. This mission is supported by the use of reliable, flexible, intelligent technological solutions and compliance with the industry’s highest security and quality standards, based on Corporate Social Responsibility excellence. In 2021, Teleperformance reported consolidated revenue of €7,115 million (US$8.4 billion, based on €1 = $1.18) and net profit of €557 million.

Teleperformance shares are traded on the Euronext Paris market, Compartment A, and are eligible for the deferred settlement service. They are included in the following indices: CAC 40, STOXX 600, S&P Europe 350, MSCI Global Standard and Euronext Tech Leaders. In the area of corporate social responsibility, Teleperformance shares are included in the CAC 40 ESG since September 2022, the Euronext Vigeo Euro 120 index since 2015, the EURO STOXX 50 ESG index since 2020, the MSCI Europe ESG Leaders index since 2019, the FTSE4Good index since 2018 and the S&P Global 1200 ESG index since 2017.

For more information: www.teleperformance.com Follow us on Twitter: @teleperformance

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