Hexaware acquires US-based Mobiquity in $182 million cash deal

IT services company Hexaware Technologies Ltd has acquired US-based digital services firm Mobiquity for $182 million in an all-cash deal, the company said in an exchange filing on Friday.

Hexaware is majority owned by private equity firm Baring Private Equity Asia. As of 31 March, Baring owned 62.59% in Hexaware.

With a presence across three continents, Mobiquity is one of the largest independent customer experience consulting firms specializing in creating frictionless multi-channel digital experiences using cloud technologies, the company said.

Mobiquity creates digital products for well-known global brands such as Amazon Web Services, Rabobank, Philips, Wawa, Backbase and Otsuka.

“Hexaware enters an exciting new phase of growth and capability with the acquisition of Mobiquity Inc. Mobiquity strengthens two of our key strategic offerings: Cloudify Everything and Customer Experience Transformation. We are seeing strong demand for these capabilities and, with this acquisition, we will be able to further accelerate our contributions to our customers’ business growth. Our combined capabilities will enhance our market positioning and opportunity to make an impact for our clients,” said R. Srikrishna, CEO, Hexaware Technologies.

The transaction involves an upfront payment of $131 million and deferred payouts of $51 million, the filing said.

Srikrishna added that the acquisition will help Hexaware grow its business in three important industry verticals.

“Forty-one percent of Hexaware’s revenue is from BFS (banking and financial services) but there is not much of banking in that. It’s largely capital markets and mortgage. We have a little bit of banking, but it is not core digital banking, which is the most important priority for all banks. Mobiquity is good at that. They have helped the largest bank in the Philippines on this front and are working with one of the largest Middle East banks for their digital banking platform,” he said.

The other two industries where Mobiquity will help Hexaware grow its business are pharma and retail, he added. “In their top 20 clients, we have just one common client and that business is small for us. We literally have no overlap in clients. Eighty-five percent of revenue comes from 20 clients. They have material clients.”

In the near term, Hexaware will focus on growing revenue through cross-selling and up-selling services across the two platforms, as well as by creating new services.