i-flex solutions sees entering into the insurance market to provide software "as the next step after providing software for financial services. Therefore, tying up with CIS would mean leveraging their experience with insurance players," said Deepak Ghaisas, chief executive officer, i-flex solution ltd.
Of the balance stake, CIS Inc employees will get 12 per cent employee stock options (Esop) and the balance 62 per cent will be bought by the parent company.
CIS, established in 1996 in Bangalore, provides software for insurance, telecom and banking sectors. i-flex solutions provides customers with competitive and state-of-the-art-technology banking automation packages along with custom software development services and strategic infotech (IT) consulting services. CIS Inc is worth $27 million while its Indian subsidiary is worth $2 million.
While the insurance sector is just beginning to open up in India, this strategic alliance will enable most of the new start-ups to get Internet savvy.
"Most of the new companies, forming joint ventures with foreign multinationals, are clients of CIS Inc, US," said Mohan Kumar, chief executive officer, CIS India.
Some of CIS Inc's clients are, Boston Mutual, Liberty Mutual, Mass Mutual, Travellers. The Indian subsidiary has two major clients - one Argentinean and another European - discussions with both are in its final stages. No Indian company has approached CIS Ltd as yet for providing software.
"This strategic alliance, we hope will be towards a productive and synergistic future," said Edward Caputo, president and chief executive officer, CIS Inc, US.
"Instead of just signing a memorandum of understanding, we have purchased equity in CIS Ltd. This equity participation ensures CIS Ltd and i-flex solutions, both of a vested interest in development. This would ensure that both the partners benefit from this alliance," said Deepak Ghaisas.
Both the companies are looking at marketing other products from their sister concern, as part of this alliance. "We will extend insurance facilities as an extension of our banking facilities and CIS Ltd will market banking facilities as an extension of insurance services," he added.
