Mid-tier IT services firm MphasiS has entered into an agreement to acquire Wyde Corporation, a US-based insurance software services provider, in an all cash deal.
The financial details of the transaction were not disclosed. Company sources, however, said the deal was estimated at 2.5-3.5 times that of Wyde’s revenues and MphasiS might have spent anywhere between $75-$105 million (Rs 330- 463 crore).
Headquartered in Minneapolis, US, Wyde posted a revenue of $30 million in 2010 with an EBITDA of 18 per cent. The company employs over 200 people and is best known for Wynsure, an insurance policy administration solution used by about 25 insurers across the US, France and Canada. Almost half of its employees are located in Paris where the company has an R&D unit.
This is MphasiS’ second acquisition in the insurance industry vertical, after AIGSS (AIG Software Systems), the AIG captive center in India in 2009. The company expects to close the transaction within the next 30 days, subject to customary conditions.
“Enhancing our value proposition to insurance companies was central to our thinking in this case. I am thrilled to find such a partner for this acquisition. Wyde brings with it world class IP and a marquee customer base,” said Ganesh Ayyar, CEO of MphasiS.
MphasiS derives close to 40 per cent of its revenues from the banking, financial services and insurance (BFSI) space. Insurance alone contributes about 10-12 per cent to its revenues. In the quarter ended April 30, MphasiS had cash reserves of Rs 1,864 crore (about $422 million).
Wyde’s Wynsure is a multi-language, multi-currency, easily customisable software that offers policy administration, claims and billing solutions across life & annuities (L&A), disability, health and property & casualty areas. The acquisition will extend MphasiS’ insurance footprint in life & annuities segment and strengthen its presence in the property & casualty segment.
According to post merger plans, MphasiS intends to operate Wyde as a product business within its insurance vertical. The present management team at Wyde led by its CEO and co-founder Jean-Rene Lyon will continue to drive the business.