Mastek to buy US IT firm STG in $30-million deal

Mastek to buy US IT firm STG in $30-million deal
15 Feb, 2008, 0126 hrs IST,PP Thimmaya, TNN

BANGALORE: The momentum of overseas acquisitions by Indian IT companies, especially by the mid-tier and small companies, does not seem to be ebbing away. The Mumbai-headquartered IT company Mastek is likely to acquire a US-based IT firm Systems Task Group International (STG) for an estimated $30 million, said sources. When contacted, Mastek said, “As a policy, Mastek does not react to market speculation.”

Mastek is focused on three verticals—insurance, government and financial services. It has also invested over $100 million in developing an insurance enterprise platform called on Elixir. STG is focused on the financial services sector providing an array of IT solutions with the main segments being insurance and commercial finance.

Mastek also increased its focus on the insurance vertical and in July 2007, it picked 90% equity stake in US-based IT company Vector Insurance Service. Mastek currently has around 3,400 people while STG has 300 personnel spread across New York City and Mumbai. Mastek, which reported consolidated revenue of Rs 810 crore for FY2007, has been on the lookout for acquisitions and it has stated publicly that it plans to acquire four IT companies in Europe and US.

It is also expecting this to be completed by June with a combined revenue of about $60 million (Rs 240 crore) from these companies.