Bangalore-headquartered IT services provider MphasiS Ltd, a subsidiary of computer giant Hewlett-Packard Co, has agreed to acquire American mortgage management specialist Digital Risk LCC for $175 million.

Florida-based Digital Risk offers software, analytics & forensics solutions for mortgage providers and insurance firms to help them hack risk of default and ensure compliance with regulatory norms.

Announcing the deal, the Inidian information technology solutions provider said, "The acquisition is an all cash deal valued at $175 million with an additional earn-out component."

Following the announcement of the deal, stock in MphasiS gained 4.94 per cent to Rs 407 a share.

Privately owned Digital Risk, which employs around 1,500 people, is expected to generate revenue of $127 million in twelve months ended December 2012.

MphasiS Chief Executive Ganesh Ayyar said in a statement that the deal furthers the company's strategy of concentrating on financial services clients, a shift that the company had started in the year of 2010.

The all-cash deal between MphasiS and Digital Risk is expected to conclude by January 31, 2013, subject to regulatory approvals.