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Why Vengroff sold its AR unit to Capgemini

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  • | 2:53 p.m. December 22, 2011
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One of the largest companies on the Gulf Coast has gotten smaller — part of a plan to get bigger than ever before one day soon.

The firm, Sarasota-based Vengroff, Williams & Associates, sold its European and Asian accounts receivables outsourcing unit in late November to Paris-based Capgemini, an IT services conglomerate. Capgemini paid $33 million for the 300-employee business unit, known in the industry as an order to cash division. A multibillion-dollar firm, Capgemini also bought a minority stake in a VWA software business.

“We didn't want to be in the outsourcing business (in Europe) anymore,” VWA founder Harvey Vengroff tells Coffee Talk. “They wanted to be in the business we were in.”

Moreover, exiting outsourcing in Europe, says Vengroff, clears a heavy risk the company faced if, and when, the European debt crisis escalates. The company's European client list was small in numbers, about 12, but large in assets, about $9 billion. “I think we had too much exposure there,” says Vengroff. “We got rid of our challenges.”

Vengroff jokes that VWA, when it sold the unit, also got rid of most of its high salary employees. That includes VWA Chairman Bob Williams, who will run the business unit for Capgemini for at least three years. Vengroff's son, Mark Vengroff, who had been CEO of the firm, also left after the acquisition.

Harvey Vengroff, meanwhile, says the sale allows the remaining firm, still Vengroff, Williams & Associates, to focus on its debt collections business, a side he says has been neglected lately. That side has about $33 billion in assets under management, says Vengroff, a number he now expects to grow to at least $40 billion in two years.

The refreshed VWA, with about 175 local employees, is run out of two buildings Vengroff owns in Sarasota. In addition to debt collection, the firm will still pursue other business lines Vengroff is in, including real estate and medical insurance claim verification. Vengroff founded VWA in New York in 1963.

The VWA employees who are part of the unit Capgemini bought are likely to remain in Sarasota. Mark Vengroff says since the company was run under an employee stock ownership plan, there was plenty of cash to spread around. Says Mark Vengroff: “It was a really good thing for all our employees.”


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