Ebix India picks up 50pc stake in BPO business VARA Technology
On Friday, insurance software solution Ebix’s Indian subsidiary Ebix Software India Private Limited announced that it has entered into a joint venture with Vara Technology Private Limited ('Vara Tech') to target the IT and BPO outsourcing market for financial and insurance sector in India.
As a part of the agreement, Ebix will infuse capital into Vara United Private Limited ('VARA'), Vara Tech's subsidiary, through subscription of newly issued shares. This infusion will enable Ebix to hold a 50-percent stake, on closing the transaction.
The new venture is expected to be branded as 'VARA-Ebix'.
On this deal, Ebix valued VARA’s enterprise at $46 million. At present, VARA claims to have an annual run rate of approximately $31 million.
Global software solution VARA at present is engaged in the business of providing IT and BPO outsourcing to large Indian financial entities. The company also provides embedded staffing, software development, and infrastructure management services to its clients.
According to Ebix, the investment is strategic, benefitting the company through access and participation in the high growth BPO and IT outsourcing area of the Indian BFSI sector.
The partnership would also enable VARA- Ebix to enhance its technological capabilities and delivery through access to global best practices and product innovations.
Commenting on the partnership, Sujit Kanoria, Director, VARA said,
"Our partnership with Ebix is a concrete step in our business journey to further build on our solid foundation, and would help us in achieving the goal of becoming a leading technology player in banking and financial services. This partnership will inculcate global best practices in the company and would immensely help in creating enhanced value for our esteemed clients."
Ebix Group Chairman, President, and CEO Robin Raina said,
"The relationship with VARA represents a significant opportunity to expand our presence in the banking and financial services in India, which is one of leading high growth economies across the globe. With approximately 3,300 employees on customer assignments, VARA already has a strong presence in the BFSI sector in India. We are excited to invest in VARA towards establishing a strong presence in the BPO and IT outsourcing areas in the banking, insurance and financial sectors in India.”
No investment bankers were involved in the transaction, with Ebix funding the transaction in cash using its cash reserves.
It seems like Ebix is aggressively looking at acquisitions in India. Just at the start of this month, the software and services company acquired online travel portal Via.com for $75 million. Earlier in May, the company invested $123 million in Mumbai-based payments solution firm ItzCash (forming its Indian subsidiary), against 80 percent stake in the company.
In July, Ebix Inc. announced raising an additional $100 million in funding.