From rural banking solutions to manufacturing services, the country?s largest business process outsourcing (BPO) company, Genpact, has forayed into newer areas through inorganic growth, having made seven acquisitions in the last 18 months.
The latest addition to its kitty is the acquisition of US-based Triumph Engineering, which provides engineering and technical services to aviation, energy, and oil & gas industries. As part of the deal, 90 Triumph employees will become part of Genpact?s infrastructure, manufacturing and services vertical. The company did not disclose the value and other details of the deal.
This is the third acquisition by the company in the first half of the current calender year. Prior to it Atyati Technologies, a technology platform provider for the rural banking sector in the country, and Accounting Plaza, a provider of finance and accounting, human resources services and ERP services, were acquired by it.
Though company officials could not be reached, analysts say all of these buys are meant to strengthen the BPO?s horizontals around high-end services like analytics, infrastructure management and process management ? which it calls smart decision services (SDS). The company already has a roadmap to take the SDS division to $1 billion in three to five years.
?Such a growth in high-end services is not possible organically despite good ramp ups. Acquisitions are the way to go to create such a business as you can get into the market from day one besides getting deep knowledge,? said Alok Shende, principal analyst and founder director Ascentius Consulting.
For the first quarter ended March 31, business process management revenues from its global clients grew 20.2% and were led by 61.4% growth in SDS, which comprises re-engineering, analytics, business consulting and enterprise risk consulting businesses.
These services were the reason for Genpact to post a 6.7% rise in its net profit in the quarter at $38.5 million from $36.5 million reported in the corresponding quarter of last year.
The spree of acquisitions at the NYSE-listed BPO firm began last year when it acquired US-based consulting and IT services company Headstrong for $550 million (R2,500 crore), which marked its foray in the IT space. This was followed by the acquisition of US-based Akritiv Technologies, a provider of cloud-based order-to-cash technology solutions and media and business research firm EmPower Research for its capabilities in social media research, media monitoring and measurement.
While some firms added geographical strength to the company, others added to its domain expertise.
In 2011, the firm also acquired the human resource operations of Nissan, Japan?s second-largest automotive company and Genpact Mortgage Services made an equity investment in High Performance Partners (HPP) to provide mortgage clients with the capability to decrease cycle times, automate loan processes, increase pull-through ratios, and significantly reduce processing and hedging costs.
?Deals are happening at a premium in the market place and these deals could be anywhere between R100 crore and R200 crore,? said another analyst.
The BPO had acquired Symphony Marketing Solutions in 2010, mortgage firm Money Line Lending Services in July 2006, SAP service provider Ice Enterprise Solutions in March 2007 and Axis Risk Consulting Services in June 2007.