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eClerx announces acquisition of Agilyst
(ECLX IN, INR 732, Buy)
eClerx announced the acquisition of Agilyst, a niche pure play back office operational and
analytics company focused on Cable and Broadband community in North American
geography. Agilyst’s provides services that include critical error identification, customer
experience analysis & end user support services. The company is expected to generate just
under USD10mm in revenues for FY12, and is profitable. Founded in 2007, Agilyst employs ~
1,000 people with delivery base in Chandigarh.
Deal details: It is an all cash deal and includes a substantial earn out component based on
Agilyst’s future performance. The transaction will be internally funded. eClerx had cash of
INR 2.0 bn i.e. INR 69 per share as at December 2011 on its books. Agilyst will operate as a
fully owned subsidiary and its management team will continue to manage day‐to‐day
operations.
What eClerx gains through this acquisition?
We believe this transaction opens up new vertical and is a good strategic extension to its
current business. Agilyst’s business model is similar to eClerx that relies on domain
knowledge, client context and focuses on automation. It also brings on board a delivery
team in tier‐2 city. The size of the deal is not disclosed but management shared that it is EPS
accretive. Overall, we believe this acquisition expands addressable market, will reduce client
concentration and diversify vertical dependency.
eClerx is currently trading at 11x FY13E, earnings and we have a ‘BUY’ rating on the stock.
eClerx will hold an analyst call for this matter at 4:30 PM IST on 13th April 2012.
Dial in nos. ‐ +91 22 6629 0376/ +91 22 3065 0151
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
eClerx announces acquisition of Agilyst
(ECLX IN, INR 732, Buy)
eClerx announced the acquisition of Agilyst, a niche pure play back office operational and
analytics company focused on Cable and Broadband community in North American
geography. Agilyst’s provides services that include critical error identification, customer
experience analysis & end user support services. The company is expected to generate just
under USD10mm in revenues for FY12, and is profitable. Founded in 2007, Agilyst employs ~
1,000 people with delivery base in Chandigarh.
Deal details: It is an all cash deal and includes a substantial earn out component based on
Agilyst’s future performance. The transaction will be internally funded. eClerx had cash of
INR 2.0 bn i.e. INR 69 per share as at December 2011 on its books. Agilyst will operate as a
fully owned subsidiary and its management team will continue to manage day‐to‐day
operations.
What eClerx gains through this acquisition?
We believe this transaction opens up new vertical and is a good strategic extension to its
current business. Agilyst’s business model is similar to eClerx that relies on domain
knowledge, client context and focuses on automation. It also brings on board a delivery
team in tier‐2 city. The size of the deal is not disclosed but management shared that it is EPS
accretive. Overall, we believe this acquisition expands addressable market, will reduce client
concentration and diversify vertical dependency.
eClerx is currently trading at 11x FY13E, earnings and we have a ‘BUY’ rating on the stock.
eClerx will hold an analyst call for this matter at 4:30 PM IST on 13th April 2012.
Dial in nos. ‐ +91 22 6629 0376/ +91 22 3065 0151
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