Xurpas buys 51% of local IT firm Storm
NEWLY listed mobile content provider Xurpas Inc. has bagged a deal to acquire a 51 percent stake in local technology firm Storm Flex Systems for around $4.3 million, a breakthrough in widening its distribution capability from purely digital to the delivery of physical goods and services.
Storm has developed a proprietary platform that enhances the employee benefits system of some of the country’s leading local conglomerates, business process outsourcing and fast-moving consumer good companies in Metro Manila and Cebu, Xurpas said in a disclosure to the Philippine Stock Exchange on Friday.
The platform allows employees of any company that has signed with Storm to exchange their current employee benefits and transform them into a wide range of products and services — such as gadgets and dining, a private carpool system, doctor consultations on demand, all the way to donations for charitable causes.
By giving them the power of choice, the platform seeks to make employees happier and more productive, while their employers are seen to get substantial gains in their ability to attract, retain and excite people.
“At Xurpas, we have always said our business is simple: we tap networks which allow us to efficiently reach potential users, and we create or acquire the best products to sell to these users. Until today, we have been distributing digital products to users on mobile telcos’ networks. The acquisition of Storm signals our expansion into an entirely new distribution network, and into the selling of physical goods and services,” Xurpas president and chief executive officer Nico “Nix” Jose Nolledo said in a press statement.
“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 noted that since inception, Storm had demonstrated “truly exponential growth,” with revenue increasing five-fold over the 2013 to 2014 period.
“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, CEO of Storm.
Storm intends to use proceeds from this deal to accelerate growth locally and branch out to other markets in Southeast Asia. It currently serves 15,000 client employees, a number seen doubling this 2015 after the buy-in deal with Xurpas.
“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,” said Nolledo.
This is the second and the largest acquisition so far by Xurpas after its successful initial public offering in December 2014. Shortly after its public debut last year, Xurpas bought a 21.7 percent stake in Singapore-based mobile gaming firm Altitude Games Pte. Ltd.
Trading on Xurpas was halted from 9 am to 10 am on Friday following the disclosure on this deal.
Xurpas is a technology company specializing in the creation and development of digital products and services for mobile users. Its portfolio includes online casual games, messaging and the so-called social discovery applications, as well as call/SMS/data bundles, peer to peer mobile airtime credit transfers and mobile commerce.
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