While, 85 per cent of the consideration would paid immediately, the balance amount has been linked to ongoing performance and paid by way of earnouts. The acquisition was being funded through internal accruals and bank borrowings, Mastek stated in a release. The acquisition is the second such initiative by Mastek during the current financial year, and follows the acquisition of another insurance-focused IT Company Vector Insurance Services in July, last year.
Under the terms of the agreement, Mastek's wholly owned US subsidiary MajescoMastek will hold 100 per cent equity stake in STG.
Head-quartered in New York with a fully integrated off-shore competency centre here, STG leverages its enterprise applications ''Renaissance'' suite and '' ParadigmASP'' to provide the full spectrum of solutions and services to customers in the North American P&C insurance industry in the areas of policy and billing administration, claims processing, and point-of-sales administration.
The Company had about 350 employees with significant P and C insurance domain expertise and a robust customer base that includes over 35 small and mid-sized American insurance carriers.
Commenting on the acquisition, Mastek Chairman and MD Sudhakar Ram said, ''This acquisition is another important step in furthering our strategy to expand our presence in both the life and non-life segments of the high opportunity US insurance market. STG enjoys very strong brand recognition and over the years, it has built a satisfied customer base in the P and C insurance industry. With STG's established strengths in the P and C segment complementing our own competencies in the life and annuity segment, our status as a leading IP-based enterprise-wide solutions provider in the insurance vertical will be reinforced with this initiative.''