MphasiS seeks to buy accounting BPO firm

MphasiS, the mid-tier Rs 770 crore IT & BPO services provider, is looking at acquiring a company with specialisation in the accounting services BPO space.

This after the company recently announced the acquisition of Eldorado Computing for a total consideration of $16.5 million.

If the company manages to go ahead with this plan, this will be its sixth acquisition after having acquired Navion, Onida Infotech, Kshema Technologies, Princeton Consulting besides Eldorado.

Bhaskar Menon, president, MphasiS BPO said: "We are scouting for a company with expertise in the accounting services BPO space as we need to ramp up this practice under our portfolio. We currently have less that 200 people in this vertical and an acquisition in this space will give us bandwidth to expand. The cost of this acquisition will be in range of less than $10 million."

MphasiS BPO currently employs 6,500 people and is hoping to be 9,500 strong by the end of the current fiscal.

The BPO arm has been actively fuelling the growth of MphasiS even as its IT services business in the recent past has been hitting air pocket. The company officials have maintained that the blip is due to certain operational reasons which are being ironed out.

MphasiS BPO currently has practices in the Sales & Services, Transaction Processing, Brokerage BPO, Tax & Accounting Services, Content Management besides web-based services.

According to the company, tax and accounting services is one of the key initiatives of the MphasiS Group to grow into higher value added services - that combine strong domain expertise with a platform of high-end technology.

In addition to this plans for acquisition, MphasiS is also expected to close a deal which might see the exit or partial exit of its long time investor Barings, who hold a significant little over 37 per cent in the company.

The bidding process is on and a decision to determine the highest bidder is expected within in the next ten days. It is understood that this stake will be picked up either by a pureplay financial investor or an overseas IT major.

Sources in the company said recently a top MNC IT services and consulting firm which is expanding rapidly in India had a meeting with MphasiS and Barings to look at options of buying this stake. No official comments were forthcoming from either of the firms.

Industry sources indicate that valuation for this stake is peaking and Barings might have to partially offload their stake in the first round and then go on to exit totally at a later stage. MphasiS reported a net profit of around Rs 120 crore for the last fiscal.