Exult’s Getting Big Off Deals With Big Companies
Excellence in Entrepreneurship Awards. Special Report
By ANDREW SIMONS
Three weeks into 2002, Jim Madden watched as the stock price on his baby, Irvine-based Exult Inc., dove 36% in the largest plunge in the company’s three-year history.
“I was shocked at how the stock was hit,” Madden said. “It was almost humorous be-cause we had just reported good quarterly results.”
The reason behind the selloff: word that Bank of America was selling part of its holdings in Exult in a year-end portfolio reshuffling.
If anything, the stock’s nosedive was a delicious contrast to the journey Exult,which manages human resource operations for large companies,has had so far.
After several big deals, Exult likely will reach a coveted $1 billion in yearly revenue in less than three years, according to Madden. As of last week, Exult counted a market value of nearly $1.2 billion, off slightly from before Bank of America’s stock sale.
Madden seems to have had a good idea at the right time. He bet he could lure big companies to outsource human resources operations with promises of big savings and an efficient, Internet-based operation.
So Madden founded Exult with Greenwich Conn.-based private investment firm General Atlantic Partners LLC in 1998, during the go-go days of the Internet.
“I really wanted to find a venture we could do on the Internet,” Madden said.
Exult transcended the dot-com bubble as the downturn in the economy convinced companies to save the kind money Exult’s service allows them to.
Now, three years after Exult’s launch, the company boasts of a business backlog of more than $3 billion and pacts with companies such as BP PLC and International Paper Co.
A consummate dealmaker, Madden continues to land big wins. A recently announced deal with Prudential Financial totals $700 million. In the past four months, Exult has signed multi-year contracts worth $1.8 billion..
Exult expects to be profitable by June, according to Madden.
Soft-spoken and even-tempered, Madden likes to meet with prospective clients for a casual dinner or lunch, sans PowerPoint presentations, and simply talk about their company.
“I want to learn as much as I can,” Madden said.
An ex-telecommunications executive, Madden oversaw MCI’s U.S. and Latin American outsourcing business. He helped grow the unit’s sales from $30 million to more than $800 million in five years.
While at MCI, Madden helped develop more than $4 billion in outsourcing pacts. Madden also created and ran the technology and process reengineering practice in the Southern California office of Booz-Allen & Hamilton.
Despite appearances, Madden is no techie (these days he’s sporting the beginnings of a goatee). A boating enthusiast from his youngest days, Madden originally attended a small school on the East Coast that taught students how to design boats.
But the instructor wasn’t impressed with Madden’s abilities, he said.
“He pulled me aside and asked me if I wanted to design a boat or own a boat,” Madden said. “I told him I wanted to own a boat. He told me I should go into business instead.”
Madden enrolled at Southern Methodist University and earned a degree in business. He also wanted a science degree, so he double majored in geology.
“I haven’t used that a day in my life,” he said.
