Mastek shares jump 16 pc on acquisition of SEG Software assets
Sudhakar Ram, CMD & CEO, Mastek said they are not buying the US firm. They are only buying the assets and the IP of the company.
By ET Bureau & Agencies |
Shares of Mastek Ltd rose more than 16 per cent during the day after the software services firm said its US unit has acquired the assets of SEG Software for an undisclosed amount. The stock closed up 13.56 per cent at Rs 208.95. (INTERVIEW OF MASTEK CEO)
The US-based wholly owned subsidiary, MajescoMastek, has acquired substantially all of the assets of SEG Software.
This acquisition would expand its presence and capabilities in the life and annuity policy administration arena.
"The acquisition is not very large and we are funding it through internal accruals only. It is completely paid for in cash and the whole idea of the acquisition is actually to accelerate our North American Elixir entry because while we had the Elixir 4.0 available for the UK, we won the Foresters deal earlier this year which gave us an opportunity to build out the North American functionality. There are number of products and state wise regulations that we needed to build out in Elixir and this came as a great opportunity for us to acquire a set of components which will readily give us the US and North American functionality instead of building it on our own. It will help us accelerate our entry into the US market," Sudhakar Ram, CMD & CEO, Mastek said in an exclusive interview to ET Now.
However, he did not disclose the exact size of the acquisition but said that it was not very large.
This acquisition follows two prior acquisitions by MajescoMastek in the North American market, with Vector Insurance Services being acquired in 2007 and Systems Task Group acquired in 2008.
The SEG product engine provides market ready product and regulatory support for virtually all lines of individual and group life, health and annuity products and extends MajescoMastek's reach into the health, true group and annuity payout markets.
The US-based wholly owned subsidiary, MajescoMastek, has acquired substantially all of the assets of SEG Software.
This acquisition would expand its presence and capabilities in the life and annuity policy administration arena.
"The acquisition is not very large and we are funding it through internal accruals only. It is completely paid for in cash and the whole idea of the acquisition is actually to accelerate our North American Elixir entry because while we had the Elixir 4.0 available for the UK, we won the Foresters deal earlier this year which gave us an opportunity to build out the North American functionality. There are number of products and state wise regulations that we needed to build out in Elixir and this came as a great opportunity for us to acquire a set of components which will readily give us the US and North American functionality instead of building it on our own. It will help us accelerate our entry into the US market," Sudhakar Ram, CMD & CEO, Mastek said in an exclusive interview to ET Now.
However, he did not disclose the exact size of the acquisition but said that it was not very large.
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"SEG as a company has spent almost 6-7 years building out a technology and what we have paid is actually a small proportion of what they have actually spent in building this technology. We expect that with this technology our entry into North American market will get accelerated and before end of calendar 2011 we should be able to have a product ready for the market," he explained.This acquisition follows two prior acquisitions by MajescoMastek in the North American market, with Vector Insurance Services being acquired in 2007 and Systems Task Group acquired in 2008.
The SEG product engine provides market ready product and regulatory support for virtually all lines of individual and group life, health and annuity products and extends MajescoMastek's reach into the health, true group and annuity payout markets.
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