Mastek eyeing insurance vertical acquisition in North America, UK

Global information technology services company Mastek is looking at new acquisitions in the insurance vertical in North America and the UK with a view to expand its operations in this market. According to a senior company official, Mastek is willing to use as much as $50 million for this venture.

A financial website quotes Farid Kazani, chief financial officer (CFO) of Mastek, saying that presently the company is concentrating on growth in the life and general insurance sectors and is negotiating with around four firms in the insurance vertical for a prospective acquisition. Stating that the firm already had eight international delivery hubs in India and Malaysia, Kazani disclosed that now they were interested in expanding their footprint in the United States and the UK, where the company already has major presence. According to him, the size of the prospective deal would be in the range of $30 to $50 million. The deal is expected to be closed by 2010 end, conditional on the assessment, management and domain competence of the targeted firms, Kazani added.

Having major presence in the US, Canada, UK, Europe, Asia-Pacific and the Middle East and employing over 3500 experts, Mastek is a leading IT service vendor serving the banking, finance and insurance sectors. According to Mastek CFO, the prospective buyout would enhance the company’s revenue during the current fiscal ending in June 2011.

In addition to making acquiring a new firm in the insurance vertical, the company is also optimistic regarding winning government projects in the UK, while looking ahead to a number of good contracts during the subsequent six months. It may be noted that over 80 per cent of the revenue generated by Mastek is from the government projects in the UK, which is experiencing an economic recession in the wake of the latest political disaster there.

Nevertheless, Kazani said that they were rather upbeat following the government change in the UK. According to him, Mastek is anticipating to win a number of important contracts from the UK government over the ensuing three to six months. He asserted that the company will witness an increase in the book order as well as progress in the deal pipeline during the next financial year. Mastek CFO added that keeping these probable developments in view, the company would recruit and additional 300 experts during the current quarter (April-June 2010).