Business process outsourcing (BPO) is the contracting of a specific business task, such as payroll, to a third-party service provider. While the service offering itself has existed for decades, BPO has gained visibility over the past five years with the maturation of the Internet environment combined with the power of broadband connectivity. These forces have created a wide range of opportunities for new entrepreneurial firms to provide specialized outsourced services to other companies, taking advantage of low offshore labor costs. Forrester Research estimates the market will grow to about $150 billion by 2008. While bulk transaction processing and shared services like HR together account for two thirds of the BPO market, a new generation of vendors will focus on specific segments like high-volume vertical processes, such as claims processing, and niche vertical applications, such as environmental data reporting.

As new companies arise to fill the burgeoning demand for BPO, they require capital to build the robust capacity and infrastructure that their corporate customers demand. The task is challenging due to the very nature of the industry: services companies by definition typically lack the hard assets that lenders seek for collateral. Westbury has been instrumental in assisting various BPO providers, developing creative structures to raise equity and debt for its clients. This sector has also been a hotbed of merger and acquisition activity, as smaller entrepreneurs seek liquidity events and larger corporations try to build the critical mass necessary to be viable in the long-term. In both financing and M & A, private equity capital is playing a leading role in the transformation of the industry.