IT solutions provider Mastek Ltd on Thursday announced the acquisition of US-based Vector Insurance Services LLC (Vector) for $9 million.
Vector is a technology solutions provider and third party administrator that focus on the North American life and annuity insurance industry, having two of America's largest insurance carriers as its customers.
The acquisition will be done by Mastek's wholly-owned US subsidiary MajescoMastek which will be acquiring a 90 per cent equity stake in Vector in an all-cash transaction for $4.5 million, as quoted by its Chairman and Managing Director, Sudhakar Ram.
"This is payable at closing and a similar amount payable over the next two years as earn-out based on business performance. The acquisition is being funded through internal accruals," Ram said.
This acquisition is revenue and earnings accretive to Mastek and is expected to strengthen the opportunity pipeline for the company in the insurance vertical.
Mastek will now be able to offer a more complete solution for insurance carriers including new business, underwriting and policy administration products by adding 'software as a service (SaaS) capabilities to its existing end-to-end enterprise software solution offerings.
The Vector operation is currently in the process of getting integrated with Mastek's existing operations, which should get implemented by August 2007.
The existing management team of Vector will continue to look after the business, led by its founder Harold Apple who has extensive insurance sector experience and will report to William McCarter, President of MajescoMastek.
Commenting on company's performance, Ram said "we are targeting a 35 per cent growth in dollar terms in FY08. We believe this level will be sustainable going forward."
Mastek is looking at adding three more verticals, which includes healthcare in the near future.
On the company's expansion plans, Ram said that Mastek has taken up expansion plans by adding 1,500 seating capacity at its Mhape unit. It is also planning to set up a 5,000 seating capacity unit near Chennai.
The company's headcount will increase from the present 3,500 to 10,000 in the next 2-3-year period.
For the July-September 2007 quarter, Mastek expects its consolidated revenues to be in the range of Rs 205-210-crore.
Net profit after tax and minority interest is likely to be around Rs 25-26-crore.
For the full year ended June 30, 2007, the company posted revenue of Rs 812.7 crore as compared to Rs 701.1 crore last fiscal. The net profit stood at Rs 90.4 crore, translating into an EPS of Rs 31.8.
Vector is a technology solutions provider and third party administrator that focus on the North American life and annuity insurance industry, having two of America's largest insurance carriers as its customers.
The acquisition will be done by Mastek's wholly-owned US subsidiary MajescoMastek which will be acquiring a 90 per cent equity stake in Vector in an all-cash transaction for $4.5 million, as quoted by its Chairman and Managing Director, Sudhakar Ram.
"This is payable at closing and a similar amount payable over the next two years as earn-out based on business performance. The acquisition is being funded through internal accruals," Ram said.
This acquisition is revenue and earnings accretive to Mastek and is expected to strengthen the opportunity pipeline for the company in the insurance vertical.
Mastek will now be able to offer a more complete solution for insurance carriers including new business, underwriting and policy administration products by adding 'software as a service (SaaS) capabilities to its existing end-to-end enterprise software solution offerings.
The Vector operation is currently in the process of getting integrated with Mastek's existing operations, which should get implemented by August 2007.
The existing management team of Vector will continue to look after the business, led by its founder Harold Apple who has extensive insurance sector experience and will report to William McCarter, President of MajescoMastek.
Commenting on company's performance, Ram said "we are targeting a 35 per cent growth in dollar terms in FY08. We believe this level will be sustainable going forward."
Mastek is looking at adding three more verticals, which includes healthcare in the near future.
On the company's expansion plans, Ram said that Mastek has taken up expansion plans by adding 1,500 seating capacity at its Mhape unit. It is also planning to set up a 5,000 seating capacity unit near Chennai.
The company's headcount will increase from the present 3,500 to 10,000 in the next 2-3-year period.
For the July-September 2007 quarter, Mastek expects its consolidated revenues to be in the range of Rs 205-210-crore.
Net profit after tax and minority interest is likely to be around Rs 25-26-crore.
For the full year ended June 30, 2007, the company posted revenue of Rs 812.7 crore as compared to Rs 701.1 crore last fiscal. The net profit stood at Rs 90.4 crore, translating into an EPS of Rs 31.8.
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