Last checked at 28 May 2010 07:00
28 May 2010
Eckoh plc
("Eckoh" or "the Group")
Eckoh's Client IVR division merges with Telecom Express
Eckoh plc ("Eckoh"), the UK's leading developer of speech recognition solutions for customer contact centres, announces that it has reached agreement to merge its Client IVR division ("the Division") with Telecom Express Limited ("TE").
Rationale for the Deal
As stated in the interim results statement on 9 December 2009, the trend in the IVR market has been downward for a couple of years - with call volumes to premium rate services declining and circulations of the printed media promoting these services falling. There remains intense price competition to win business. This has made it challenging for Eckoh to sustain profitability within the Division whilst maintaining the high standards of customer service and compliance that clients require. Merging with the complementary activities undertaken by TE will create a larger and more experienced team covering a broader portfolio of content expertise with a greater critical mass of business that will drive synergies and economies of scale. It will also allow TE access to the commercial benefits of working through Eckoh's Network.
Terms of the Deal
Under the terms of the agreement, Eckoh will take a 27.5% share in the enlarged TE, with all 17 employees currently working in the Division transferring their employment to TE. It is anticipated that any transition will be completely seamless to the existing client base, but that they will benefit from being supported and serviced by the larger team which, combined, will have an even greater depth of industry experience. Nik Philpot, Chief Executive Officer of Eckoh, will be the Group's representative on the Board of the enlarged TE. The deal is expected to complete by mid-June 2010.
Background on Eckoh Client IVR and TE
Eckoh's Client IVR division operates in the media sector helping companies to generate incremental revenue through a wide variety of premium priced interactive services such as games, competitions, voting and information lines, which are accessible to consumers over the telephone or on their mobile using their telephone key pads. The Client IVR division derives its income by taking a share of the revenue that is generated. In the six months ended 30 September 2009, the Division generated a contribution to Group central overheads of £75,000 on turnover of £4.8 million.
Telecom Express specialises in developing and managing services that allow consumers to interact with publications, TV and radio programmes, and websites via telephone and other digital platforms. TE offers clients, which include some of the largest media owners in the UK, media services, such as information lines, voting and competitions; online and in-paper dating services; phone-based psychic and astrology services; and pay per lead advertising services. Founded in 1989, TE is privately owned and employs a team of over 60 staff from its offices in central London. In the year ended 30 June 2009, TE generated a profit before tax of £2.1 million (including a profit on disposal of a business division of £2.1 million) on turnover of £16.3 million.
New Eckoh
As a result of the merger, Eckoh's core focus will now be on the continuing Speech Solutions division, which provides specialist speech recognition to companies looking to maximise the efficiency of their contact centre operations. This part of the business has recently seen significant levels of growth and this new agreement provides the opportunity for Eckoh to focus on deriving maximum benefit from its market-leading core business of speech recognition solutions.
Nik Philpot, Chief Executive Officer of Eckoh, said: "It is very exciting to bring together two businesses with such a long history to create a dynamic new company that not only has a more sustainable future but which will be able to service its clients with greater effectiveness. I look forward to working with the new Board to help make the combined business a success for all concerned. At Eckoh, we can now focus all our energies on maximising the growth, opportunity and profits we are experiencing in our speech business. As a pure-play operator in this sector and the market leader in speech recognition solutions, I feel confident that the resulting benefit to our shareholders will be forthcoming and significant."
Damon Russell, Chief Executive Officer of Telecom Express Limited, added: "Whilst the media market has in recent times proved challenging, the combination of Eckoh and Telecom Express provides the perfect opportunity to create a reinvigorated and viable new company, which can support our combined clients with renewed vitality and increased expertise. We believe our customers will be as excited as we are about the prospects of working with the new venture."
Ends
Enquiries
Eckoh
Nik Philpot, Chief Executive Officer
Adam Moloney, Group Finance Director
www.eckoh.com Tel: 01442 458 300
Corfin Communications
Harry Chathli, Claire Norbury Tel: 020 7977 0020
Seymour Pierce
Jonathan Wright Tel: 020 7107 8000
Notes to Editors:
About Eckoh
Eckoh is the UK's largest provider of hosted speech recognition services, with over 7 years of experience in successfully deploying speech solutions. These allow our clients to efficiently manage their contact centres by replacing the more repetitive calls with an effective and intuitive automated service. Our solutions address high volume service requests including billing queries, delivery tracking services, travel timetable checks or transactional payments at a fraction of the cost of a live agent and on a 24 hour a day basis.
Our carrier-grade platform has the scalability to handle over 650,000 calls an hour and up to 8,000 simultaneously. Our platform has the capacity to manage even the most dramatic and unexpected call peaks, making it the most scalable and flexible speech-enabled platform in Europe. All of our clients' automation requirements; from speech, SMS, web to touch tone IVR are met via a single infrastructure, protecting them from the need for large scale technology investment - now or in the future.
Eckoh formed a strategic business alliance with BT in 2003. Working in partnership we have helped 20 clients across the financial services, government, utilities, retail & distribution, telecoms and travel & leisure sectors to transform their business operations through the introduction of hosted self-service solutions.
For more information, visit: www.eckoh.com
About Telecom Express Limited
Telecom Express is the leading provider of interactive marketing services to the UK Media industry. Formed in 1989, the Company was sold by founders Peter Caplan and Damon Russell in 1998 to Abbott Mead Vickers BBDO (AMV BBDO). In 2004 Damon Russell lead a successful management buy out from AMV BBDO and then set about consolidating the market with acquisitions of two key competitors.
Telecom Express manages reader, listener and viewer communications, as well as delivering targeted content to different audience groups, in order to help it's media clients retain and develop customer relationships. The company has an unrivalled client portfolio encompassing major newspaper and magazine publishers, as well as premier Radio and TV broadcasting groups. Telecom Express' services are multi-faceted, spanning all key touchpoints with customers over the telephone, the interment and mobile media.
For more information visit: www.telecomexpress.co.uk