MOBILE consumer technology provider Xurpas Inc. has gained access to populous China by buying into Micro Benefits Ltd., a Hong Kong-based company providing innovative human resources (HR) solutions to topnotch companies in the mainland.
In a disclosure to the Philippine Stock Exchange on Wednesday, Xurpas announced that it acquired a 23.53 percent stake in Micro Benefits for $10 million. This is the biggest overseas investment deal made by Xurpas so far.
Micro Benefits, through its wholly owned subsidiary Micro Benefits Financial Consulting (Su Zhou) Co. Ltd (MB China), began its operations in 2013, focusing on using mobile technology to address the growing problem of worker turnover at large manufacturing facilities in China. Today, the company’s proprietary “Company Link” platform is used by close to 700,000 of its clients’ employees, and by improving worker engagement, has been proven to reduce turnover by as much as 15 percent.
MB China’s current roster of clients includes FORTUNE 500 firms engaged in technology and consumer electronics, athletic footwear and sports equipment and other large companies with manufacturing facilities in China.
This investment is seen unlocking synergies with a local Xurpas subsidiary engaged in a similar business. Xurpas controls majority of Storm Flex Systems Inc., whose platform allows employees to exchange their standard employee benefits into a wide range of products and services, ranging from gadgets, travel packages and insurance.
“Combining the platforms of Micro Benefits and Storm Flex Systems Inc. creates a more compelling business solution fully intended to optimize their HR technology platforms which they could both offer to their clients,” said Nix Nolledo, CEO of Xurpas. “Expansion is one of our continuing priorities, and this is a strategic move that establishes China as a new and hugely lucrative frontier for our growing enterprise business, while simultaneously allowing us to offer new solutions to companies here in Asia.
Storm Flex Systems Inc.’s current roster of clients include the Philippines’ leading local conglomerates, financial services firms, business process outsourcing and fast-moving consumer good companies.
Xurpas has so far invested around $14 million in six offshore technology companies, Nolledo said. The investment in Micro Benefits was the fifth since Xurpas debuted on the local stock exchange on Dec. 2, 2014, then raising P1.36 billion in fresh capital.
The string of overseas buy-in deals made by Xurpas is seen as part of its diversification program.
“The offshore investments represent product and territory expansion opportunities. Most of our revenues at present come from the Philippines still but moving forward, we expect to see more and more of our growth coming from overseas,” Nolledo said.
From its humble roots as a start-up enterprise with a capitalization of only P62,500 in 2001, Xurpas is now valued by the stock market at P27.5 billion, quadrupling its market capitalization from P6.8 billion at listing.
Trading on Xurpas was halted from 9:30 am to 2:30 pm on Wednesday following the disclosure of this transaction.