A report in The Economic Times Monday cited MphasiS CEO Ganesh Ayyar as saying: “For the past 15 months or so, we have been looking for a specialized company in the banking and capital markets space, and Digital Risk presented the best opportunity.” The transaction value also includes US$25 million to US$30 million in payments staggered over the next two to three years.
Bangalore-based MphasiS is owned by U.S. parent company Hewlett-Packard, and provides applications, infrastructure and business process outsourcing (BPO) services.
Discussions with Digital Risk took about two months, according to Ayyar. The deal, which is subject to regulatory approvals, is expected to close by Jan. 31 next year, after which Digital Risk will retain its brand identity and operate as a standalone business unit within MphasiS. Its current CEO and chairman Peter Kassabov will report to Ayyar.
The Economic Times report noted that for the past year or so, MphasiS had been focusing on the financial services industry (FSI). Digital Risk specializes in risk and compliance services, and owns a patent-pending data analytics software platform, called Veritas.
Over 100,000 people subscribe to our newsletter.
See stories of Analytics and AI in your inbox.
MphasiS said while Digital Risk had been growing at about 70 percent over the last three years, with expected US$127 in revenue in 2012, its business was limited to the United States. As such, there is no overlap in clients between the two companies and Digital Risk will complement MphasiS’ existing FSI business, presenting significant cross-selling opportunities.
“This is not a generic acquisition, it is a highly specialized, domain-specific transaction,” said Amit Singh, executive director and head of technology practice at Indian investment bank, Avendus, which advised MphasiS on the deal, the report said.