Life

Raman Roy’s (who was heading Spectramind of Wipro earlier) Quatrro BPO Solutions has announced the acquisition of mortgage loan processing operations and the technology platform of US-based Preferred Financial Group, Inc. The financial terms are undisclosed.

The deal is considered unique since Quatrro would become the first BPO from India to offer an onsite-offsite model. This path has already been taken by software services firms. According to Raman Roy, this acquisition will help the company to acquire the technology platform, the people and the origination business of the US partner and that would also enable to provide end-to-end fulfillment services to mortgage lenders across the US.

Apparently this model will hep Quatrro give services at 30 per cent to 50 per cent cheaper than the US costs.  The acquisition will be done by Quatrro Mortgage Solutions, a subsidiary of Quatrro. PFG is a privately-held financial services corporation that originates, underwrites and funds mortgage products.

In April 2007, Quatrro had bought a majority stake in Chennai-based KPO firm Scope eKnowledge for an undisclosed amount. It bought out Mauritius-based fund eIndia’s stake in the 500 people firm.

As rumoured earlier, Wipro Technologies, the global IT services business of Wipro Ltd, has acquired Infocrossing, Inc., a Nasdaq-listed IT infrastructure management company for $600 million in an all cash deal. Wipro will pay $18.70 a share, which is about 13 per cent premium over the six month average of Infocrossing’s share price.
The deal, the largest by Wipro and the largest overseas acquisition by an Indian IT company yet (see the table, bottom), is expected to close by the fourth quarter of 2007.

It also needs regulatory approvals. The deal is also significant since it’s the first acquisition by Wipro of a listed company abroad, which shows that Indian companies are getting better at wading through the complex regulatory hurdles and disclosure norms. Infocrossing had revenues of $232.4 million and net income of $9.3 million for the year ending March 31, 2007.

The company provides integrated managed infrastructure services to global clients. The acquisition will give Wipro Technologies a strong presence in the remote infrastructure management space, by adding five data center locations and about 900 employees in the US, according to Sudip Banerjee, President, Enterprise Solutions of Wipro Technologies. Infocrossing also brings in expertise in health plan and payer management segments. The company has processed over 175 million claims annually and also provides contracted services to over 90 managed care organisations.
The operating margins of Infocrossing is only in the range of 10-14 per cent as against Wipro’s 25 per cent. Apparently, the margin differences will be mitigated in the next 2-3 years, according to company officials. The current global IT infrastructure market is estimated to be around $150 billion, of which the remote infrastructure management services (that can be offshored) will be worth $70 billion, according to NASSCOM.

Private equity fund General Atlantic is believed to be in talks with Kerala-based aviation and logistics software company IBS Software. An unconfirmed report by The Economic Times says General Atlantic may invest $25-35 million in the company, which has clients like Cathay Pacific, Nippon Cargo Airlines, and others. The company’s CEO is V K Mathews. It was set up in 1997.