Mastek snaps up US co STG for $29 mn

BANGALORE: Mastek, the Mumbai-headquartered mid-tier IT firm, has announced the acquisition of New York-based System Task Group International (STG) for $29 million (Rs 116 crore) in an all-cash transaction.

Mastek will be acquiring 100% stake in STG, with 85% of the total consideration payable at the time of acquisition and the remainder to be linked to ongoing performance and paid by way of earn-outs. The acquisition is being funded through internal accruals and bank borrowings.

ET had first reported about this development in its edition dated February 15. STG registered revenue of $17 million and an EBITDA of $1.73 million for the financial year-ended December 31, 2007. In a notice to the stock exchanges, Mastek said this acquisition is the second such initiative during the current financial year and follows the acquisition of another insurance-focused IT company Vector Insurance Services in July 2007.

Following this transaction, STG will operate as "STGMastek". Headquartered in New York with a development centre in Mumbai, STG provides solutions for the property and casualty insurance industry. It has about 350 staff with a customer base of 35 small and mid-sized American insurance carriers.