Offshore BPO pure play EXLService, which itself has been subject to acquisition rumours (see EXLService buyout rumours), is to pay $91m in cash to acquire finance and accounting (F&A) rival Outsource Partners International (OPI). EXL is taking over OPI to set up an F&A centre of excellence, and to help it build out a platform-based BPS (business process services) strategy across the business.
EXL also reported strong Q1 results with revenue up 33.8% to $72.9m, up 4% on the previous quarter, and operating profits that were up 16% to $7.5m (although the margin dropped to 10.3% from 11.9%). EXL also upped its FY11 guidance following the strong start to the year, and the acquisition of OPI. It now expects revenue of between $347m and $355m vs. a previous target of £295 to £305m, assuming OPI closes before 1 June. However it is maintaining its adjusted operating margin target of 13% to 14%. EXL is assuming $50m of additional revenue from OPI in FY11 (seven months contribution) – so EXL is looking at organic growth of between and 17% and 21% in the year.
We recently spoke with EXL’s president and CEO Rohit Kapoor to discuss the company’s strategy and opportunities. TechMarketView’s Foundation Service clients can read the full analysis in UKHotViewsExtra.