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Hexaware buys Mobiquity for $182 million, to absorb all employees

Hexaware buys Mobiquity for $182 mn, to absorb entire employee base
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Hexaware Technologies announced the acquisition of US-based Mobiquity for $182 million, on Friday. The deal entails upfront payment of up to $131 million, and deferred consideration of up to $51 million.

The acquisition will be funded through a mix of internal accruals and external borrowings, the firm said. Mobiquity’s leadership and teams will continue without any changes to the structure. The 650-strong workforce — spread across the US, Amsterdam, and India — will be absorbed by Hexaware.

Mobiquity recorded revenue of $70 million in 2018, recording a three-year compound annual growth rate of 24 per cent.

There are no overlapping customers at this point. Hexaware will gain at least 20 new clients through the acquisition — spread across the US and Europe, R Srikrishna, chief executive officer of Hexaware, said.

Hexaware will start accruing revenues from the acquisition within the next few quarters, said Srikrishna.

Hexaware has updated its dollar revenue guidance from 14 per cent for calendar year 2019 to 20 per cent for the next four quarters, following accruals from the acquisition.

“Hexaware has 41 per cent revenue share coming from banking and financial services. It deals largely in capital markets and mortgages, whereas Mobiquity comes with a strong play in digital banking and pharmaceuticals,” said Srikrishna. The Hexaware management had, in the recent quarter, said the banking, financial services and insurance vertical was growing slower than expected.

Mobiquity creates digital products for brands such as Amazon Web Services, Rabobank, Philips, Wawa, Backbase, and Otsuka.

Source: Business Standard