EXL Q4 Net down 52% to $7.5 mn; acquires RPM Direct for $74 mn

BPM major ExlService Holdings today said its net profit has fallen by over 52 per cent to USD 7.5 million for the quarter ended December 31, 2014 due to disentanglement costs associated with a transitioning client.
The Nasdaq-listed firm, which posted a net profit of USD 15.9 million in the fourth quarter ended December 2013, has also announced acquisition of analytics firm RPM Direct for about USD 74 million.
"The merger consideration for RPM is USD 47 million in cash, plus contingent cash consideration of up to USD 23 million and about USD 4 million of restricted stock," EXL said in a statement.

The net profit was impacted by about USD 8.5 million in the said quarter and USD 26.3 million for the year due to reimbursement of disentanglement costs, EXL said.
EXL's revenues grew nine per cent to USD 135.3 million in the reported quarter from USD 124.1 million in the year-ago period.
For the fiscal ended December 31, 2014, the company's net profit fell about 32 per cent to USD 32.4 million, while revenue was up 4.3 per cent to USD 499.2 million.

"EXL had a strong finish to 2014 with record annual revenues and earnings... The revenue growth was led by analytics and business transformation segment and specifically analytics, which grew 44 per cent year-over- year," ExlService Holdings Vice Chairman and CEO Rohit Kapoor said.

On the acquisition, Kapoor said the buyout will combine EXL's large-scale analytics team with RPM's leading data-driven marketing analytics expertise and proprietary data assets focused on insurance and healthcare.
"With the acquisition of RPM, analytics is now expected to represent more than 20 per cent of EXL's revenues," Kapoor added.
The acquisition is expected to close in the first quarter of 2015, subject to the fulfilment of certain closing conditions and is expected to be accretive to adjusted EPS.
RPM maintains its own database on over 250 million consumers in the US in order to drive optimal data-driven decision making and predictive analytics through a flexible, on-demand service model.

RPM will become part of the EXL Analytics group WITH 65 people, taking the total team to close to 1,600 data scientists.
For 2015, EXL expects revenue to be between USD 570 million to USD 590 million, an annual revenue growth of 8.5 per cent to 12.5 per cent.
"Looking at the year ahead, I am optimistic about the demand environment and see EXL extremely well positioned with a range of solutions to help our clients look deeper to find innovative solutions to their business challenges," Kapoor said.