Mastek acquires STG for $29-mn

MUMBAI, INDIA: IP-led enterprise solutions provider Mastek today announced the acquisition of Systems Task Group (STG) International Ltd, in an all-cash transaction for $29 million.

STG is an IP-based enterprise solutions provider to the North American property and casualty (P&C) insurance industry.

According to the agreement, Mastek will be acquiring a 100 per cent equity stake in STG, with 85 per cent of the total consideration payable at this time and the remainder to be linked to ongoing performance and paid by way of earn-outs.

Following this transaction, STG will operate as ‘STGMastek’.

This acquisition is the second one by Mastek during the current financial year, and follows the acquisition of another insurance-focused IT company Vector Insurance Services in July 2007.

Sudhakar Ram, chairman and MD, Mastek, said, “This acquisition is another important step in furthering our strategy to expand our presence in both the life and non-life segments of the high opportunity US insurance market.”

The acquisition is being funded through internal accruals and bank borrowings.

STG was advised by Avendus in this transaction. Integration process will be completed by June 2008.

The STG management team, including its founder Praful Nikam, will continue to be actively involved in its operations and support William McCarter, who will be taking over as president of STGMastek.

All other employees will also be retained and will continue to support Mastek.