Software company Mastek Ltd said on Monday it has acquired 90 per cent stake in US-based Vector Insurance Services LLC for nearly $ 9 million.
"This acquisition reinforces our solutions-driven offerings in the high opportunity US insurance market. Vector fits very well with our overall strategy to be a leader in providing end-to-end IT solutions within the insurance vertical," MajescoMastek President William McCarter said.
As per the agreement, Mastek's wholly-owned US subsidiary MajescoMastek would buy 90 per cent equity stake in Vector for $4.5 million payable at closing.
The company said a similar amount would be payable over the next two years as earnout based on business performance.
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 in a filing to the Bombay Stock Exchange.
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.
Vector reported revenues of $4.2 million in the financial year ended December 31.
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.
The existing management team of Vector would continue to look after the business, led by its founder Harold Apple, who would report to MajescoMastek President McCarter.
Other managers and employees would also be retained. Shares of Mastek jumped 17 per cent on the BSE and were trading at Rs 333.50. The scrip gained as much as Rs 48.45 in early morning trade.
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