Outsourced Services
Within the Business Services sector, Millpond focuses on investments in businesses providing mission critical products and services underpinning a strong customer value proposition and high levels of customer retention. Many of these businesses offer particular expertise which is difficult for their customers to develop and maintain internally, present structural barriers to competition and, when combined with the mission critical nature of their services, command pricing power underpinning a favorable investment risk-return profile. Additionally, today’s outsourced services sector often includes businesses where technology and human resources are utilized to differentiate service offerings and go-to market strategies, providing businesses the ability to scale and offering attractive investment attributes.
Millpond targets businesses possessing the following core characteristics:
- Mission critical services underpinning a high customer value proposition and recurring demand.
- Critical reliance on specialized expertise that is more optimally managed and maintained outside of a customer’s core operations.
- There is often a level of competitive differentiation paired with Millpond’s operating process, which provides a compelling value proposition to those companies’ target market.
- Target investments possess attractive financial metrics including historical revenue growth and compelling profit and cash flow margins.
There is often a level of competitive differentiation paired with a superior operating process within Millpond’s prospective partner companies, which provides a compelling value proposition to those companies’ target market. Millpond, during the investment evaluation stage, seeks to validate the efficacy, value proposition, competitive differentiation, and growth opportunities of prospective partner company offerings.
Several key trends are driving growth in the large and fragmented Outsourced Business Services sector, yielding attractive investment opportunities, which include:
- An under penetrated market, with an estimated 70{8afb20a47ed9386a5bae861fad109c33adb5951d628e195b83929375c5fb920f} of functional business services still performed in-house across all enterprise sizes
- The expansion of outsourced service adoption by small- and medium-sized enterprises, driven in part by technological advances, which facilitate efficient service delivery
Sub-Sectors of Interest
- Technology-enabled Service Providers
- Digital Marketing Solutions
- Software-as-a-Service (SaaS)
- Compliance and Risk Management
- Human Resources Outsourcing
- External Sales Team Enablement
- Business Process Outsourcing
- Data Collection and Analytics
- Information Technology Security & Monitoring
- Enterprise Mobility Services