Business process outsourcing (BPO) company EXL Service is eyeing buys in the US in the insurance domain with captives having annual revenue between $25 and $30 million (Rs 115-140 crore).
“Insurance is a domain where we want to acquire and there are captives looking to sell. Captives of large global banks with around 30,000 employees, smaller ones which want to convert into third party format in the next two-three years are there. And, the deal sizes are attractive,” Rohit Kapoor, president and CEO of EXL Service, told Business Standard.
The purchasing price of these captives with 200-1,000 full-time employees will be in the range of $25-50 million (Rs 115-230 crore). The BPO recently acquired American Express’ Global Travel Service Center operations in Gurgaon for approximately $30 million (Rs 140 crore). Last year, it acquired the operations of European logistics provider Schneider Logistics in the Czech Republic.
“Clients are looking to divest their investments in captives and major BPO players having sufficient cash reserves are eyeing them. This trend is likely to continue,” said Sabyasachi Satpathy, managing director of outsourcing advisory company Tholons. He added that service providers are driven by the long-term contract value and/or access to capability or new geography. “Being an incumbent for BPO or IT services plays in favour of the service provider,” he said.
The Nasdaq-listed BPO has $120 million (Rs 550 crore) of cash reserves and will utilise the money for strategic expansions and to be a category killer in the insurance vertical. “We are actively in talks with almost 10 companies and the deal will be done without bankers,” added Kapoor.
