EXL eyes $25-50 mn buyouts abroad

EXL Service Holdings, an IT services provider, is on the lookout to acquire companies in Eastern Europe, the Philippines, South Africa and China. The company is looking to mitigate its risks by diversifying into delivery and support centres in other cheaper destinations and also offer capabilities to service clients from markets other than the US.

The acquisitions, in each of the geographies, could be in the range of $25-50 million in revenue and will add capabilities in the verticals such as research and analytics where EXL is already fast gaining ground. "We have almost $85 million in cash with the company and the ability to use stock options also lend us flexibility to do atleast two of the acquisitions this financial year," said Rohit Kapoor, president and chief financial officer of EXL.

The company acquired a single company last year, Inductis, a strategy and analytics company serving the financial services and insurance industries.

Almost 30 per cent of EXL's revenues come from the research and analytics, and risk advisory services and the company is keen to add capabilities in the same through acquisitions in the UK, a market that remains unexploited, claimed Kapoor.

For adding the voice-based services and clients, the company will look to the Philippines and in South Africa, EXL is on the look out for adding diverse business verticals to its BPO business. The company is also eyeing to service the domestic market. "Although the size of domestic BPO-ITeS market is nothing to boast about, but our international clients who have business in India have been talking to us to set up centres that will service the domestic markets."

The company hopes to finalise a deal with an insurance client for the domestic market soon.

EXL's sales and marketing expenses will continue to increase as it invests heavily in the front-end sales and client relationship management functions.

"With a view to enabling us to scale more effectively, we will continue to strengthen our back-end support and enabling functions, add additional physical infrastructure. We will also continue to focus on reducing attrition and increase recruitment drives," concluded Kapoor.