Listed mobile content provider Xurpas Inc. has acquired a 51-percent controlling stake in an employee benefits management firm for $4.3 million (P189.5 million).
Nico Jose Nolledo, Xurpas president and chief executive officer, said that the acquisition of Filipino firm Storm Flex Systems Inc. will “enhance employee benefits” as workers will now be under Storm, which will enable them to “plan their own benefits.”
“An employee now under Storm can better plan his own health benefits and other concerns. This will be for employees’ rights and benefits,” Nolledo said in a phone interview, noting that employees can plot and customize their own benefits according to their preferences.
“The acquisition of Storm signals our expansion into an entirely new distribution network, and into the selling of physical goods and services. And because Storm’s clients are able to provide their employees with an effectively wider range of benefits, it is yet another example of how technology can provide companies an ‘unfair advantage’ in the most unlikely areas such as employee attraction and retention,” Nolledo said.
Storms’s flex benefits system is used by leading domestic conglomerates, business process outsourcing firms, and FMCG companies in Manila and Cebu.
The deal for acquiring a 51-percent interest in Storm was signed on February 26. The purchase amount will be sourced from the P1.24 billion funds raised from its initial public offering (IPO) December last year.
This is the second acquisition of Xurpas following its purchase of a 21.7-percent stake in Singaporean IT firm Altitude Games PTE Ltd. for $741,000 as a part of its bid to expand in the region.
Storm will use the money raised from the transaction “to further accelerate its already impressive growth locally, and branch out to other markets in Southeast Asia.”
Storm provides a platform where employees of any company can exchange and transform their current benefits to other products and services such as gadgets and dining privileges, a private carpool system, doctor consultations on demand, all the way to donations for charitable causes.
Xupas said that with the power of choice, employees are happier and more productive, while employers get substantial gains in their ability to attract, retain, and excite people.
“We are joining forces with Xurpas because we strongly believe that it is the ideal partner to help us realize our vision of building better employee lives through the provision of better benefits. We feel this partnership will allow us to achieve the next stages of growth and development in the region. There is a tremendous opportunity ahead of us,” said Peter Cauton, Storm CEO.
Through the deal with Xurpas, Storm plans to boost and expand its client employees to 30,000 this year from the 15,000 to date.
“The business has been running successfully for the past two years, and can boast of a truly astounding growth trajectory. It has a sound revenue generation model which is both unique and exportable to other markets. So we consider it as one of the great inroads to regional expansion,” Nolledo said.
Xurpas is setting its sights on expanding in the Southeast Asian market and will be extending to the greater emerging markets in the longer term.
The company’s net income from January to September 2014 went up 66 percent to P147.55 million from P88.68 million in the previous year, while revenues advanced 61 percent to P276.10 million from P171.93 million previously on strong sales of its mobile content services segment.
Xurpas is a technology company specializing in the creation and development of digital products and services for mobile end-users, as well as the creation, development and management of proprietary platforms for mobile operators. It has two business segments: gaming and enterprise focused on telecommunications solutions.
It specializes in “casual game communities” wherein prepaid subscribers can gain unlimited access to 15 games that can be played with multiple online subscribers for a minimum of P5.
Notable casual games the company has developed included Globe Games with Friends, Let’s Play Smart, and Grab-A-Gold.