Mastek looks to buy insurance vertical in UK, N America

MUMBAI: IT major Mastek is eyeing an acquisition in the insurance vertical in North America as well as the UK, and could spend up to $50 million for the same, a senior company official said.

“Our focus is to grow in the insurance sector — both life and general — in these markets. We are already operating here and are talking to three-four firms for a potential buyout. The deal size could be between $30-50 million. This is our sweet spot,” said Mastek's CFO Farid Kazani. Mastek, which provides IT services to insurance, banking and finance firms, said it might close the deal by this year-end. Much would, however, depend on the valuation, management and domain capabilities of the target companies, he said.

The acquisition, Mr Kazani said, will boost the company’s revenue for the financial year 2010, ending in June.

Mastek is also upbeat about government projects from the UK and expects some good deals in the next three to six months, he said. Around 80% of Mastek’s business comes from government projects in the UK, which witnessed a slump following the recent political crisis in that country.

“We are quite optimistic after the change in the government in UK. We are expecting to bag some major deals over the next three to six months. Next fiscal, there will be a growth in the order book and improvement in the deal pipeline,” Mr Kazani said. Mr Kazani said the company will be hiring about 300 professionals in the April-June quarter this year. Mastek’s current head count is around 3,300.