i-flex acquires mantas
i-flex Solutions’ Rs 565-crore ($122m) transaction to buy out Mantas improves the former’s profile among financial services players which grapple with operational risk and compliance risk. i-flex already covered its operational risk through its product, Reveleus. Anti-money laundering is a key component in compliance, for which i-flex was already collaborating with Mantas.
The need to own a product company in this space stems from the importance given to anti-money laundering by government agencies. In recent years, it has gained importance due to the links between money laundering and funding of terrorist activities.
i-flex hopes to benefit by cross-selling solutions to each others’ customers, and from a wider geographical client base. Customers benefit by having a single platform, and i-flex stands to gain more by owning Mantas, rather than partnering it.
In 2005, Mantas’ revenues were at Rs 143 crore ($31 million) and it suffered a loss of $77,000, primarily due to amortisation of intangibles. Sales growth was 40%. During the current year, sales have increased in the first six months by 26% Y-O-Y and more importantly, it made an operating profit of Rs 12.4 crore ($2.7 million) from continuing operations, compared to a loss of Rs 7.5 cr.
Its financial performance has improved from the second half of 2005 (calendar year). That explains the price that i-flex is paying, about 3.5 times its trailing four quarter sales. Synergies could come in terms of savings in integration and selling and administration costs, which in turn could further improve profitability in the years to come.
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The need to own a product company in this space stems from the importance given to anti-money laundering by government agencies. In recent years, it has gained importance due to the links between money laundering and funding of terrorist activities.
i-flex hopes to benefit by cross-selling solutions to each others’ customers, and from a wider geographical client base. Customers benefit by having a single platform, and i-flex stands to gain more by owning Mantas, rather than partnering it.
In 2005, Mantas’ revenues were at Rs 143 crore ($31 million) and it suffered a loss of $77,000, primarily due to amortisation of intangibles. Sales growth was 40%. During the current year, sales have increased in the first six months by 26% Y-O-Y and more importantly, it made an operating profit of Rs 12.4 crore ($2.7 million) from continuing operations, compared to a loss of Rs 7.5 cr.
Its financial performance has improved from the second half of 2005 (calendar year). That explains the price that i-flex is paying, about 3.5 times its trailing four quarter sales. Synergies could come in terms of savings in integration and selling and administration costs, which in turn could further improve profitability in the years to come.
Read More
posted by Yovan Shah at 10:56 PM
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