Mastek acquires US-based Vector Insurance Services
16 July 2007
services firm Mastek Ltd today announced its acquisition
of a 90-per cent stake in US-based Vector Insurance Services
LLC, which focuses on North America''s life and annuity
insurance sector, for $10 million.
Vector reported revenues of $4.2 million in the financial year ended 31 December 2006.
In a filing with the Bombay Stock Exchange, Mastek, the acquisition is being funded through internal accruals and the consideration would be paid partly in cash and partly by way of future cash earn outs, Mastek said.
According to the agreement, Mastek''s wholly owned US subsidiary Majescomastek would buy the 90-per cent equity stake in Vector for $4.5 million a similar amount would be payable over the next two years as earn-out based on business performance.
" Vector fits very well with our overall strategy to be a leader in providing end-to-end IT solutions within the insurance vertical," William McCarter, president, Majescomastek, said. "This acquisition reinforces our solutions-driven offerings in the high opportunity US insurance market."
The company says the acquisition would strengthen Mastek''s operations in the US insurance vertical and enable greater value for its shareholders over the long-term. Following this transaction, Vector would operate as Vectormastek, it added.
The integration process of Vectormastek with Mastek''s existing operations is expected to be completed in about 30 days and its contribution would be reflected in Mastek''s consolidated performance this year onwards, the company said.