Deal with STORM allows Xurpas to expand from digital distribution to delivery of goods (Business World)

February 28, 2015 | News

XURPAS, INC. has sealed an agreement to secure a controlling stake in a local human resource consultancy firm, expanding the listed company’s capability from the distribution of digital products to the delivery of goods and services.
The listed firm told the stock exchange it acquired 37,565 common shares, equivalent to a 51% interest in Storm Flex Systems, Inc., for P190.89 million.

Storm has developed a proprietary platform that allows company employees to transform their benefits into a wide array of products and services such as gadgets and dining, a private carpool system, doctor consultations on demand, and even donations to charitable institutions.

The “flex benefits system” is currently used by some of the country’s leading local conglomerates, business process outsourcing firms, and fast-moving consumer goods companies in Metro Manila and Cebu.

“Until today, we have been distributing digital products to users on mobile telcos’ networks,” said Xurpas President and Chief Executive Officer Nico Jose S. Nolledo, who is also a minority shareholder and director of Storm prior to the acquisition.

“The acquisition of STORM signals our expansion into an entirely new distribution network, and into the selling of physical goods and services.”

Storm will use the fresh equity from Xurpas to boost growth locally and venture into other markets in Southeast Asia.

After the buy-in, the listed firm expects to double the total number of client employees served by STORM to 30,000 this year.

“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,” Mr. Nolledo said, noting that STORM’s revenue rose five-fold from 2013 to 2014.

“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,” STORM CEO Peter Cauton said.

This marks Xurpas’ second acquisition since raising P1.24 billion from an initial public offering last year. In December, the listed company took a 21.7% interest in Altitude Games PTE Ltd., a Singaporean mobile game developer and publisher.

Xurpas shares shed 5.57% or 66 centavos to end at P11.18 per shareon Friday.

 

This article was originally published in Business World Online.


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