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MANILA, Philippines - The business process outsourcing unit of the Ayala group said it is planning to acquire a company that provides back office services to the healthcare industry.
Alfredo Ayala, LiveIt Investments Ltd president and chief executive, said there is a big opportunity in healthcare services especially with the runaway costs of the industry in the US.
“We will be opportunistic [in our acquisition so] we do not have a specific budget in mind since the valuation [of companies] at this time is good,” he said.
Last March, LiveIt through its unit HR Mall Inc., bought LA-based IQ BackOffice LLC, a company that provides human resource services like payroll and technical services and consulting services for small and medium enterprises. Ayala said the company has a non-disclosure agreement regarding the acquisition price.
After the planned expansion into healthcare back office services, Ayala said LiveIt would stick to the subsectors it is now servicing, which include advertising and graphics, legal, and voice.
Last year, Integreon, another LiveIt subsidiary, signed a 10-year agreement with CMS Cameron McKenna LLP for outsourcing middle office services. CMS Cameron McKenna is a UK member of CMS, a European provider of legal and tax services. The total value of services involved in this accord is $852 million, the legal industry’s largest outsourcing agreement.
During the first half of this year, LiveIt’s investee companies registered a revenue of $489 million, of which $152 million is the firm’s share of the total. This was 16 percent higher from a year ago on the back of client volume growth across all investees.
LiveIt’s bigger scale and cost efficiencies allowed it’s share of earnings before interest, tax, depreciation and amortization to jump 55 percent to $11 million. This paved the way for the company to have an operating net income of almost $1 million and trimmed the reported net loss to $12 million. This net loss was mainly due to the non-cash charges like amortization for Stream and Integreon’s acquisitions and interest expense to the leverage buyout of Stream.
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