SourceCorp, which began life as a document imaging service bureau roll-up, has entered into an agreement to merge with HOV Services. HOV Services is an India-based document services outsourcing specialist that acquired SourceCorp competitor Lason back in 2007. Back in the late 1990s, Lason and SourceCorp (then known as FYI) engaged in a bit of a bidding war for service bureaus. SourceCorp, which was founded by executives from outside our industry, took a more fiscally responsible to the roll-up. I remember a conversation with a few SourceCorp execs at AIIM 1998, who accurately predicted the impending fall of Lason – which actually had three ex-execs go to jail for stock fraud, or something along those lines.
Lason was eventually bought by the investment group Charterhouse for something like $25 milllion and some assumed debt. Charterhouse, which also had an investment in document capture ISV Top Image Systems, then flipped Lason for $148 million to HOV three years later. At the time, the combined company was estimated to have more than $200 million in annual revenue. SourceCorp, which reported revenue of greater than $400 million in 2005 as a public company, was sold to the investment firm Apollo Management in 2006 for $475 million. I thought SourceCorp had dispersed some of its businesses since then to narrow its focus, but we’ll estimate that the new HOV/SourceCorp entity is worth at least $500 million annually. Definitely an interesting starting point for a BPO business.