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Mumbai based second tier IT services company Mastek Ltd announced the acquisition of US based Vector Insurance Services LLC (Vector) for USD 9 million.

Vector is a technology solutions provider and third party administrator that focus on the North American life and annuity insurance industry, having two of America's largest insurance carriers as its customers.

The acquisition will be done by Mastek's wholly owned US subsidiary MajescoMastek which will be acquiring a 90 per cent equity stake in Vector in an all-cash transaction for USD 4.5 million, its Chairman and Managing Director, Sudhakar Ram said.

"This is payable at closing and a similar amount payable over the next two years as earn-out based on business performance. The acquisition is being funded through internal accruals," Ram said.
This acquisition is revenue and earnings accretive to Mastek and is expected to strengthen the opportunity pipeline for the company in the insurance vertical.

Mastek will now be able to offer a more complete solution for insurance carriers including new business, underwriting and policy administration products by adding 'software as a service (SaaS) capabilities to its existing end-to-end enterprise software solution offerings.

The Vector operation is currently in the process of getting integrated with Mastek's existing operations, which should get implemented by August 2007.
The existing management team of Vector will continue to look after the business, led by its founder Harold Apple who has extensive insurance sector experience and will report to William McCarter, President of MajescoMastek.

Commenting on company's performance, Ram said, “We are targeting a 35 per cent growth in dollar terms in FY08. We believe this level will be sustainable going forward."

Mastek is looking at adding three more verticals, which includes healthcare in the near future.