Mphasis to acquire Princeton Consulting of UK

IT and BPO firm Mphasis BFL Group said on Monday it is buying UK-based Princeton Consulting, whose largest customer is British Telecom, in an all-cash deal for £7.73 million (Rs 64 crore).

The London-based Princeton has an annual revenue of more than £6 million and 100 employees; it specialises in software development in customer relationship management for 15 clients, including British Telecom.

"The acquisition will help Mphasis broaden BPO and IT services offerings in Britain and Europe," Mphasis Chairman and CEO Jerry Rao told reporters in Bangalore.

The buyout is to be completed by March and is expected to be immediately 'EPS accretive,' he said, adding, all the 100 people including 33 in Bangalore will be absorbed in Mphasis.

"There won't be any migration of jobs and all of them will remain on board. In fact, there will be incremental addition of jobs both in India and the United Kingdom," Rao said.

Princeton CEO Afshin Rabbani, who will take over as vice chairman of Mphasis European operations, said over a video conference call that the firm had about 15 clients and the largest was British Telecom, generating over 50 per cent of its revenues.

Princeton is Mphasis's second acquisition this fiscal after it bought Bangalore-based Kshema Technologies in April in a $21 million cash-cum-stock deal.

"With Princeton, we have gained strong expertise in CRM and are strong in the UK," Rao said.

Venture capital-funded Princeton, founded in 1997, earned revenues of £6 million last year.

"We will now be able to offer our clients a more complete portfolio of services from process consulting to complete end-to-end delivery," Rabbani said.

Mphasis CFO Ravi Ramu said Mphasis earns from Europe 15 per cent of its IT revenues and 25 per cent of its BPO revenues.

"We are open for acquisitions of small and mid-scale firms who have a combination of both BPO and IT and are not taking over pure play ones," Rao said, adding the firm had cash reserves of about $27 million.