Ayala Corporation’s Business Process Outsourcing (BPO) investment company, LiveIt Investments Ltd., announced today that its investee company HRMall, which provides outsourced IT-enabled HR services out of Manila, has entered into a definitive agreement to acquire IQ BackOffice, LLC of Los Angeles, California, which delivers high quality, software-enabled, real-time, SAS70 Type II-certified finance and accounting BPO services to mid-sized companies in the U.S. IQ BackOffice targets companies with annual revenues of $50 million to $1 billion, but its business includes clients with revenues up to $10 billion.
The combined companies are valued at approximately $15 million. The management team of IQ BackOffice LLC, including David Schnitt, its founder and CEO, will purchase a 17.5% ownership interest in HRMall. LiveIt will own the balance of 82.5% of the company and will support the company’s strategy to accelerate its growth in its current markets in the U.S. and Asia.
HRMall will now be able to provide a complete suite of low-cost, best-in-class HR, finance and accounting services to the underserved mid-sized enterprise sector in the US and Asia, through a combination of proven technology, proprietary software and processes, deep domain expertise in multiple industries, and efficient outsourced operations that enable its clients to gain world-class back office capabilities while achieving 30% to 50% annual cost reduction. HRMall’s clients will now include over 30 US companies in the manufacturing and distribution, restaurant, hotel and hospitality, retail, professional services, property management, financial services and other industry sectors, as well as members of the Ayala group of companies (including Ayala Corporation, Ayala Land, Bank of the Philippine Islands, Globe Telecom, Manila Water and IMI). The Company will operate as HRMall in Asia and IQ BackOffice in the US, and will employ a total of over 300 employees out of its centers in Manila, Chennai, Mumbai and Los Angeles.
David Schnitt, who before starting IQ BackOffice had previously co-founded NASDAQ-listed professional services firm Resources Global Professionals, will be appointed Chief Executive Officer of HRMall, while Gilbert Santa Maria, a senior adviser to LiveIt who had previously headed eTelecare Global Solutions’ (now Stream Global Services) Philippines operations and global M&A, will be appointed chief operating officer and chief finance officer. Both will be based in Los Angeles, California. The management team of IQ BackOffice in the U.S. and India will be combining with the Manila-based HRMall leadership team.
IQ BackOffice’s founder and CEO, David Schnitt said: “I believe that HRMall’s existing HR services such as payroll are very complementary to the services we provide to our existing clients in the US, and that the Philippines greatly complements our service delivery capabilities from India and the US. Furthermore, LiveIt’s investment strategy and philosophy are very much in alignment with our operating philosophy, and its leadership team has the knowledge and experience to help us achieve our growth plans. I am very much looking forward to working with HRMall and the Ayala group of companies to create significant long-term value for our clients, associates and shareholders.”
John Philip Orbeta, chairman of HRMall, stated, “The combination with IQ BackOffice will allow us to achieve our vision of offering a full range of highly efficient, market leading back office solutions to medium-sized clients around the world. We warmly welcome the IQBackOffice team into the Ayala family.”
Fred Ayala, CEO of LiveIt, added, “This acquisition by HRMall adds a high growth, high margin and very complementary business to HRMall, with numerous cross selling and operating efficiency opportunities, and is expected to create significant value for LiveIt.”
All of the stockholders of HRMall and IQ BackOffice have approved and signed the sale and purchase documents. The transaction is subject to customary closing conditions, and is expected to close before April 30, 2011.
HRMall, Inc. is a BPO company focused on providing Human Resource related services – including outsourced payroll – to clients in the Asia Pacific region. Its processing and data centers are located in Manila, Philippines. It implements, deploys, hosts and processes technology-enabled HR systems, including Peoplesoft HCM, to its clients. It also provides talent management solutions, allowing human resources professionals to strengthen and personalize employee experiences, resulting in a more motivated and engaged workforce. HRMall provides outsourced services to clients across a wide variety of industry sectors including telecommunications, banking and financial services, utilities, BPO, real estate, retail, construction, property management, resort management, management services, cooperative, and high-tech manufacturing. It currently services clients with employee counts from 100 to 12,000, and has the capability for full-scale ERP implementations or pre-configured SaaS-type requirements. Additional information is available at www.HRMall.com.ph.
About IQ BackOffice
IQ BackOffice is a comprehensive Finance and Accounting BPO provider to the underserved segment of Mid-Sized Enterprises in the US with annual revenues between $50 million and $1 billion. It is headquartered in Los Angeles, CA with operations in Los Angeles, Chennai and Mumbai. Services include accounts payable, accounts receivable, payroll and complete general accounting outsourcing. IQ BackOffice leverages its proprietary software platform to enable IQ BackOffice and its clients to manage processes at world-class levels across the enterprise. IQ BackOffice is SAS70 Type II certified. It has over thirty public and private company clients across multiple industry verticals, including restaurants, manufacturing and distribution, hotels, entertainment, property management, financial services and other industries. IQ BackOffice employs over 200 people in the US and India and has an experienced management team with deep finance and accounting domain expertise. Additional information is available at www.IQBackOffice.com.
The above statement was based on the disclosure made today, April 18, 2011, to the Securities and Exchange Commission and Philippine Stock Exchange, by Ayala general counsel and compliance officer, Solomon M. Hermosura.