The acquisition of US-based mortgage management specialist Digital Risk LCC will decrease MphasiS' dependence on its parent company Hewlett-Packard (HP).

Bangalore-based information technology services provider MphasiS recently announced that it had agreed to acquire Florida-based Digital Risk for $175 million in an all-cash deal.

Digital Risk sells software, analytics and forensics solutions for mortgage suppliers as well as insurance firms to help avoid risk of default and ensure conformity with regulatory regulations.

Analysts are of the view that this acquisition will help MphasiS, an arm of computer giant HP, to cut its dependence on its parent for business and enhance performance. The deal will also help MphasiS to stretch its feet into the mortgage-related software segment.

In the third quarter of current year, MphasiS kept on seeing challenges in receiving more business from its parent company.

Vimal Gohil, an analyst with Asit C. Mehta Investments Intermediates, said, "Management had indicated that MphasiS will outgrow the dependence on HP, considering that it has been underperforming compared to its peers in terms of revenue growth for the past eight quarters."

At the end of the most recent quarter, MphasiS reported Rs 2,575 crore of cash on its books, and it was under intense pressure to expand its business. HP has also being suffering sluggish growth in its enterprise business, which accounts for more than 50 per cent of MphasiS' revenues.