New Delhi: Nasdaq-listed BPO firm ExlService Holdings is eyeing acquisitions globally in the financial services segment, which currently contributes a major part to its revenue.
“We have close to $115million on the balance sheet. We are very actively engaged in terms of taking a look at some of these opportunities and I would hope over the next few months, we would do some acquisitions as such,” ExlService chief executive officer and president Rohit Kapoor said.
“The target company could be in the $5-20 million in size or even bigger,” he said.
The company has chosen to dominate certain industry verticals like insurance, utilities and select areas within banking and finance services (BFS) like credit cards and mortgage and so the acquisitions would really be fitting in with these categories, he said.
About 50% of ExlService’s revenue come from the insurance vertical, while utilities contributes 26% BFS and transportation and logistics comprise 9% and 7% of the company’s revenues respectively.
“We would always want to keep $40-50 million cash on the balance sheets. What this allows us to do is use somewhere between $50-75 million of cash to be able to do an acquisition and that would be the sweet spot for us in terms of deal size,” Kapoor said. He, however, did not divulge names of target companies.
The company recently announced the acquisition of the BPO unit of US-based Schneider Logistics in Czech Republic as a part of a multi-year outsourcing agreement with the logistics firm. The facility serves as EXL’s third outsourcing service delivery location outside of India and Philippines.
ExlService has 13 delivery centres globally and employs about 9,500 people.
The company also said it expects to save about $5 million this year through some cost-saving measures.
“We have done a lot of work in our cost associated with transportation, facilities and infrastructure, travel and entertainment. We have chosen not to cut salaries but have rationalised costs, which would not impact the customer or the employee,” he said.
“This year, we think the total cost saving measures that we have implemented will give us close to about $5 million of cost saving,” he added.