Zensar to acquire insurance solutions firm Cynosure for $33 million

Acquisition of US-based company to help strengthening position in property & casualty insurance space

Midsize IT services company Zensar on Wednesday said it has entered into a definitive agreement to acquire the US-based Cynosure Inc. for a consideration of about $33 million (Rs 2.15 billion). The consideration also includes deferred payments upon the acquired entity achieving the performance targets over the next 24 years post the closure, the RPG Group company said in a regulatory filing to the exchanges.

Chicago-headquartered Cynosure which reported $20 million in revenues in calendar year 2017 provides Guidewire platform implementation services to Property and Casualty (P&C) insurance carriers, a huge compliment to what Zensar offers in that space. The acquisition will be funded by a mix of internal accruals and external debt. 

Owned by Guidewire Software Inc., a California-headquartered NYSE listed company, Guidewire is a software platform which integrates multiple processes of the insurance sectors such as policy, billing, claims and customer engagements. This helps the insurance companies to launch products faster. 

Cynosure will also bring platform capabilities in the insurance segment which help Zensar to make a further inroad into the fast-growing insurance software market. 

The Insurance vertical currently accounts for approximately 15 per cent of Zensar’s overall revenues.

Harsh Goenka, Chairman of RPG Enterprises and Zensar said: “Insurance is one of the focus areas for Zensar. The combined capabilities of Cynosure, with its Guidewire capabilities in the P&C insurance sector and Zensar’s digital expertise, will augment the company’s growth.”

“The digitalization of the insurance sector with reference to its products, sales channels and consumer engagement is increasingly driven by digital technologies,” said Sandeep Kishore, CEO & MD of Zensar. “Cynosure bring successful implementations, providing core system modernization with rich customer relationships that will serve as a significant value addition to our offerings.” 

Cynosure which has a team of around 150 experts globally, has an offshore development centre in Bengaluru. The management and team will become a part of Zensar’s Insurance vertical.

This will be Zensar’s third acquisition in the last 18 months, focussing on the digital space. In March last year, the Pune-headquartered company had acquired retail technology provider Keystone Logic Solutions for about Rs 1.32 billion. Prior to this, in November 2016, the company had acquired UK-based Foolproof, which provides design and consulting services for customer experience.

Zensar has been making rapid progress in its effort to grow base in the digital space, through a mix of acquisitions and organic growth. In the fiscal quarter ended 31 December 2017, the digital space led by technologies automation, machine learning, predictive analysis and blockchain, accounted for 38.8 per cent of Zensar’s revenues of $122.6 million, showing a sequential growth of 9 per cent. The company says that more than half of the company’s recent wins are Digital wins.

Post the acquisition, Cynosure will continue to be managed by the founders led by Sid Wadhwa, CEO & Co-founder. The management and team of Cynosure in the US and Bengaluru comprising of over 150 experts, will become a part of Zensar’s Insurance vertical.