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Mumbai, July 16 Mastek today announced the acquisition of Vector Insurance Services LLC, a technology solutions provider and third party administrator that focuses on the North American life and annuity insurance industry.

Mastek will be acquiring 90 per cent equity stake in Vector in an all-cash transaction for $4.5 million payable at closing and a similar amount payable over the next two years as earnout based on business performance.

The acquisition is being funded through internal accruals, said a Mastek release.

Vector comes with an attractive operating status and the acquisition is revenue- and earnings-accretive to Mastek.

The transaction is expected to strengthen the opportunity pipeline for Mastek in the insurance vertical, where the company has a strong customer base and a growing market presence.

It has also developed intellectual property in this domain.

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

Analyst firm Gartner has predicted that by 2010, 30 per cent of new software purchases will be delivered via an application utility or a SaaS model.

These offerings will be available through a combination of three different models: traditional software licensing, applications services and critical process outsourcing.

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