Mastek sets sights on buyouts in US, UK
Mastek is in talks with target companies and has sought shareholder approval to raise Rs 150 crore overseas.
By TNN |
MUMBAI: Indian software services provider Mastek, which recently got a makeover with a new management team, is pursuing acquisitions in the US and UK to help enhance its insurance software, Elixir.
The firm has begun talks with target companies and has sought shareholder approval to raise Rs 150 crore overseas.
Mastek Group chief financial officer (CFO) and finance director R S Desikan said the company had intentionally not added certain functionalities in Elixir and the acquisitions would fill those gaps. “We have a team in the US for M&A,” he added.
The company had cash and invested funds of nearly Rs 120 crore as on June 30. Part of the money would be used for capital expenditure and the rest would be available for acquisitions. Fresh funds would be raised through overseas convertible bonds or external commercial borrowings.
In June, Mastek acquired Vector Insurance Services LLC, a provider of policy acquisition, administration, and processing solutions to insurance customers in the North America.
However, this was a small acquisition involving an upfront payment of $ 4.5 million and with a similar amount payable over the next two years as earnouts.
The company is also expanding its employee strength and has set aside Rs 80 crore for a new campus coming up in Chennai on 15 acres of land. “In the first phase, we will add 1,500 people and the same number every year after that,” according to Mr Desikan.
The company employee strength is currently around 3,200 people. Shares of Mastek ended 0.3% lower Rs 280.20 on the BSE on Thursday.
The firm has begun talks with target companies and has sought shareholder approval to raise Rs 150 crore overseas.
Mastek Group chief financial officer (CFO) and finance director R S Desikan said the company had intentionally not added certain functionalities in Elixir and the acquisitions would fill those gaps. “We have a team in the US for M&A,” he added.
The company had cash and invested funds of nearly Rs 120 crore as on June 30. Part of the money would be used for capital expenditure and the rest would be available for acquisitions. Fresh funds would be raised through overseas convertible bonds or external commercial borrowings.
In June, Mastek acquired Vector Insurance Services LLC, a provider of policy acquisition, administration, and processing solutions to insurance customers in the North America.
However, this was a small acquisition involving an upfront payment of $ 4.5 million and with a similar amount payable over the next two years as earnouts.
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The company is also expanding its employee strength and has set aside Rs 80 crore for a new campus coming up in Chennai on 15 acres of land. “In the first phase, we will add 1,500 people and the same number every year after that,” according to Mr Desikan.
The company employee strength is currently around 3,200 people. Shares of Mastek ended 0.3% lower Rs 280.20 on the BSE on Thursday.
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