EXL may acquire firm in Eastern Europe or US

[dhilipkumar]

EXL may acquire firm in Eastern Europe or US

NEW DELHI: BPO firm ExlService Holdings (EXL) said it's hopeful of closing an acquisition in Eastern Europe or the US soon. It's currently evaluating 5-10 firms with capabilities in areas such as insurance, utilities, compliance and risk management.

The company has cash reserves of about $112 million, of which it will spend about $70-75 million on potential acquisitions, EXL president and CEO Rohit Kapoor said.

Insurance and utilities are the largest verticals for the BPO company and target companies would be those with proprietary platforms or other capabilities in these areas. "Regulatory compliance would be a key growth area as companies, especially financial institutions, will have to comply with a host of new regulation in the aftermath of the global financial crisis," Mr Kapoor said.

EXL has not made any acquisitions in the last two years. In 2008, it was in the race to acquire British insurer Aviva's captive operations in India and Sri Lanka and domestic BPO firm InfoVision. While rival firm WNS acquired Aviva Global Services for $228 million, UK's Serco Group bought a 60% stake in InfoVision for about Rs 97.7 crore in December last year. Mr Kapoor said high valuations have been a deterrent in the past but sellers' expectations are now becoming more realistic.

The BPO firm said it continues to see a healthy pipeline of outsourcing deals in the market. "There is strong demand as more and more companies look to cut costs," Mr Kapoor said.

To meet rising demand, EXL is setting up a 500-seat facility in Pune, which will be ready by April, and has also taken a 300-seat additional facility in Noida.

The company expects revenues in 2009 to be between $170- 175 million, over 60% of it from the US.
The company expects revenues in 2009 to be between $117- 175 million, over 60% of it from the US.