MphasiS to snap up US firm for Rs 958 cr

Last Updated: Tue, Dec 04, 2012 03:10 hrs
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IT outsourcing services provider, MphasiS on Monday said the company had signed a definitive agreement to acquire US-based Digital Risk, for $175 million (Rs 958 crore).

There is also an additional earn-out component, which would be paid on a certain milestone, the Bangalore-based company said.

Digital Risk, which provides risk, compliance and transaction management solutions to mortgage companies in the US, employs over 1,500 people in its offices located in the US.

The company has been growing at a compound annual growth of 70 per cent in the last three years.

In 2012, the company expects to report revenues of $127 million.

The acquisition is expected to bolster MphasiS's presence in the banking and capital market segment that accounts for 26 per cent of its overall revenues.

"We began our journey of transformation in 2010, focusing on the financial services industry. This acquisition is central to our strategy of offering specialised services in chosen segments," Ganesh Ayyar, CEO said.

According to the company, the transaction is expected to close by January 31, subject to regulatory approvals and customary closing conditions.

On its completion, the acquired entity will operate as a standalone business unit, retaining its brand identity.

MphasiS, which reported revenues of Rs 5,098 crore for its accounting year ended 31 October, had a cash reserve of Rs 2,575 crore quarter ended July 31.

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