Tuesday, December 4, 2012

MphasiS Ltd.

The company has announced that it would acquire US based Digital Risk, an independent provider of 
risk, compliance and transaction management solutions to the north American mortgage market.

The acquisition price is USD 202 million of which USD 175 million in cash and USD 27 million would 
be from earnings over 2.5 years.

The deal is expected to close by January 2013 and it would be EPS accretive in Year 1 (FY13). A
rough calculation indicates that the acquisition can boost MphasiS’s Year 2 (FY14) eps by about 2-8%, 
depending on how Digital Risk’s revenue and margins ramp up.

Management expects Digital Risk’s CY12 revenue to be USD127million, which implies 60% y-y growth 
and equals about 12% of MphasiS's revenue.

Digital Risk has increased revenue at a three-year CAGR of 70%. 

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