EXL acquires US-based audit services firm for $53 mn

BPO firm EXL Services today announced it has acquired US-based audit services firm Overland Solutions for USD 53 million (about Rs 326 crore) in an all-cash deal.
Overland Solutions provides premium audit services, inspection surveys, high value residential surveys and loss control consulting solutions. It has around 750 employees and a network of 1,000 independent contractors across the US.
The acquisition will add to EXL's position in property and casualty insurance (P&C) industry with its leading domain expertise, proprietary technology and client relationships which includes 21 of the Top 25 P&C insurers, EXL said in a statement.
Overland Solutions also adds to EXL's on-shore delivery capabilities with its nationwide footprint, it added.

On the financial details of the deal, EXL said: "The merger consideration of USD 53 million in cash was funded from existing cash resources on our balance sheet."
The transaction is expected to be immediately accretive to adjusted EPS and contribute around USD 10 million of revenue in the fourth quarter, it added.

EXL services today also reported a 54 per cent decline in net income for the quarter ended September 30, 2014 at USD 6.1 million from USD 13.2 million in the year-ago period.
Revenue for the July-September quarter rose marginally to USD 122.5 million against USD 122.3 million for the quarter ended September 30, 2013.

"Revenue for the quarter ended September 30, 2014 was reduced by approximately USD 9.6 million due to reimbursement of disentanglement costs," the company said.
During the quarter, the firm won 7 new clients, including 5 transformation clients.
Headcount as of September 30, 2014 stood at 23,050 against 21,350 as of September 30, 2013 and 23,100 as of June 30, 2014.
During the July-September quarter, EXL Services entered into a USD 50 million five-year revolving credit facility with an option to increase the commitments under credit agreement by USD 50 million.
The credit facility is expected to be used for working capital and strategic acquisitions.

The company opened a new centre in Alabang, the Philippines, adding 570 workstations of additional delivery capacity and opened a new delivery center in Dallas, Texas to serve our F&A clients.
On outlook, EXL Services said it expects revenue to be in the range of USD 514-518 million in the 2014 calendar year.
The firm reported employee attrition for the quarter ended September 30, 2014 of 38 per cent, compared with 25.4 per cent for the quarter ended September 30, 2013 and 34.1 per cent for the quarter ended June 30, 2014.