Hexaware circles US firm for a $50m kill

Deal likely in the second half of year

MUMBAI: Hexaware Technologies Ltd, the Rs1,039 crore IT and BPO service provider, is close to finalising a mid-size overseas acquisition.

A source said the company is likely to buy a firm in North America for $50 million, though the deal will not be sealed before July. Apparently, the Hexaware management feels the valuations are too high at present and could come down in the second half of the calendar year.

Atul Nishar, executive chairman, Hexaware Technologies Ltd told DNA Money, “We are looking for overseas buyouts in BFSI (banking, financial services and isurance) space, but nothing has been finalised as of now. The company will look for possible buyout targets from July.”

Hexaware is working towards  becoming a $1 billion revenue  company.

It is also increasing its headcount to 8,000 by the end of 2008, from around 7,000 now.
Analysts Viju George, Kunal Sangoi and Nikhil Chakrapani of Edelweiss Research said in a February 22 research report on the company that attrition, at 19.5%, for the last quarter was the highest in six years, up from 18% in Q3CY07.

The company’s CY08 order book stands at $210 million, 40% higher than the CY07 order book of $150 million, and has a deal pipeline of $100 million at present.

According to Nishar, there is no cancellation or delay in any overseas project, but more orders are lined up in the coming quarters.

The company added 16 new clients during the last quarter taking the active client count to 175 compared with 166 the previous quarter and 129 a year ago.