Bangalore-based IT company MphasiSBSE 3.81 %
has acquired Florida, US-based data analytics company Digital Risk, for
$200 million (aboutRs 1100 crore) in an all-cash deal, a senior
executive of the company said.
The transaction value also includes about $25-30 million in milestone-linked payments that are staggered over the next 2-3 years.
"For the past 15 months or so, we have been looking for a specialised company in banking and capital markets space and Digital Risk presented the best opportunity," said Ganesh Ayyar, chief executive of MphasiS, which over the past year or two, has been focusing more on catering to the financial services industry. MphasiS, owned by computer-maker Hewlett-Packard, was in discussions with Digital Risk for about two months.
Standalone Business Unit
The transaction is expected to close by January 31, 2013, subject to regulatory approvals. Upon completion, Digital Risk will operate as a standalone business unit within MphasiS, retaining its brand identity. Digital Risk's current CEO and chairman Peter Kassabov will report to Ayyar.
Digital Risk, which owns a patent-pending data analytics software platform called VeritasBSE 1.97 %, specialises in offering services in the risk and compliance area, especially to the mortgage industry.
Its business is limited to the US. With expected revenues of about $127 million in 2012, Digital Risk has been growing at about 70% over the past three years and has profit margins that are in the teens, according to MphasiS.
MphasiS' purchase of Digital Risk will offer an exit route for private equity firm Century Capital, which owned about 40% in the company.
There is no overlap in clients and the new company complements its existing business in financial services industry, and presents significant cross-selling opportunities, according to MphasiS.
The transaction value also includes about $25-30 million in milestone-linked payments that are staggered over the next 2-3 years.
"For the past 15 months or so, we have been looking for a specialised company in banking and capital markets space and Digital Risk presented the best opportunity," said Ganesh Ayyar, chief executive of MphasiS, which over the past year or two, has been focusing more on catering to the financial services industry. MphasiS, owned by computer-maker Hewlett-Packard, was in discussions with Digital Risk for about two months.
Standalone Business Unit
The transaction is expected to close by January 31, 2013, subject to regulatory approvals. Upon completion, Digital Risk will operate as a standalone business unit within MphasiS, retaining its brand identity. Digital Risk's current CEO and chairman Peter Kassabov will report to Ayyar.
Digital Risk, which owns a patent-pending data analytics software platform called VeritasBSE 1.97 %, specialises in offering services in the risk and compliance area, especially to the mortgage industry.
Its business is limited to the US. With expected revenues of about $127 million in 2012, Digital Risk has been growing at about 70% over the past three years and has profit margins that are in the teens, according to MphasiS.
MphasiS' purchase of Digital Risk will offer an exit route for private equity firm Century Capital, which owned about 40% in the company.
There is no overlap in clients and the new company complements its existing business in financial services industry, and presents significant cross-selling opportunities, according to MphasiS.
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