ExlService eyeing acquisitions in Eastern Europe
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ExlService eyeing acquisitions in Eastern Europe

Tuesday, 27 November 2007, 12:23 Hrs
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New Delhi: ExlService Holdings, one of India's leading BPO firms, is mulling multimillion dollar acquisition deals in Eastern Europe even as it strengthens its presence in the domestic market.

"We are looking at Eastern Europe, which is primarily going to be driven by an inorganic strategy. Acquisitions in Europe will be primarily for our finance business," Rohit Kapoor, co-founder and chief operating officer, ExlService, told IANS.

"The ideal deal size for the acquisitions would be companies with revenues of $10-25 million. We have about $91 million in cash on our balance sheet right now, and we have currency as stock that we can use as well," Kapoor added.

The firm, which registered revenues of about $121 million for 2006 and has set a revenue target of $160-170 million for the current year, is also actively looking at strengthening its presence in the domestic market.

"We want to do domain-specific work, primarily back-office and transaction-based work in India. Our domestic business will primarily be in the domain that we are already in, which is insurance, banking and financial services, telecom, transportation and utilities," Kapoor highlighted.

"In the domestic BPO business, we plan to create separate infrastructure in tier-two cities. We are exploring the greenfield project route as well as acquisitions," he said adding that the company has plans to set up large-scale campuses in Hyderabad and Noida, near Delhi.

"In our three to five year plans, investments in SEZs (special economic zones) and staying with the STPI (software technology parks of India) units are our area of focus. We will expand all our new activities in SEZs."

ExlService is will also open an 80,000-sq ft delivery centre in the Philippines with an investment of $10 million. The centre will be operational by April-May 2008.

The Nasdaq-listed BPO firm also said the company's operations were not very badly hit by the recent crisis in the US sub-prime mortgage market.

"With regard to the sub-prime crisis, only seven percent of our revenues come in from clients dealing in mortgage," Kapoor highlighted.

"We have two customers in the mortgage industry, one a prominent mortgage bank, which has very little exposure to the sub-prime market, making up only four percent of its total business."

According to Kapoor, the company's margins were also not much hurt by the rising rupee against the weakening US dollar.

"Volume growth and operational efficiencies have helped us to narrow the effect of rupee appreciation," he said adding 52 percent of its business comes from Britain.
Source: IANS
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