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Mumbai-based Hexaware Technologies announced the acquisition of US-based digital technology firm Mobiquity for a total consideration of $182 million.
“The acquisition of Mobiquity fits in perfectly into our three-pronged strategy of adopting automation, cloud and customer experience transformation. While our capabilities are already quite evolved in the areas of automation, the new acquisition will help us augment our capabilities in cloud and customer experience transformation,” R Srikrishna, CEO, Hexaware Technologies, told BusinessLine.
The deal has been funded through a combination of internal cash, a term loan of $20 million and some deferred payments that’ll get funded by internal accruals. It will help Hexaware fight it out for large digital transformation deals where a combination of scale and capabilities is essential, Srikrishna said.
Digital firm
The deal will see revenues flowing into Hexaware with immediate effect.
Mobiquity has already been building digital products for some of the large global enterprises including Rabobank, Philips, Wawa, Backbase and Otsuka.
Headquartered in the US, and with a global presence across three continents, Mobiquity specialises in creating frictionless multi-channel digital experiences using cloud technologies.
They are one of the very few Digital Customer Experience Consulting Partners for AWS and are experts at leveraging some of the most sophisticated capabilities of AWS.
“This is the largest ever investment by Hexaware and the combined entity aims to directly compete with large digital agencies and consulting firms,” Srikrishna said.
He said Mobiquity will continue to remain an independent brand and will help create consumer enterprise-like capabilities where brands become bigger than the parent company itself.
EPS to rise
“We will retain every single employee of Mobiquity and look at jointly developing new digital platforms,” Srikrishna said. “On a GAAP basis, excluding the cost of transaction, we expect the deal to be EPS neutral. On a non-GAAP basis, it will add 10 per cent to the EPS on an ongoing basis. From H2, we’ll see a 10-per cent bump from what would’ve been an organic growth.”
Hexaware had laid out a capital outlay of over $250 million for acquisitions over a 2-3 year period. Post the Mobiquity acquisition, Srikrishna says the company will not look at another acquisition for at least couple of years.
Mobiquity adds to Hexaware’s global delivery footprint with its centres in Florida, Boston, Philadelphia, New York, Amsterdam, Pune and Ahmedabad.
Client proximity
Being closer to clients in the US will benefit Hexaware in both bagging as well as executing digital deals. “From a delivery footprint perspective, we already had two delivery centres in Atlanta and Virginia. Their centres are all complementary as they have them in Boston, Philadelphia, Florida and San Francisco. The way digital works, being closer to the client with more delivery centres is always better,” Srikrishna said.
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