Info-tech

Mastek scouting for acquisitions, will double head count in two years

Rajesh Kurup Mumbai | Updated on March 26, 2019

John Owen, Chief Executive Officer, Mastek Group

Intending to further its growth through the inorganic route, mid-tier software services firm Mastek is looking to acquire two-three companies in the next one year. The company, which gets nearly 82 per cent of its global revenues from digital, expects it to grow to 90 per cent in the next two years.

“We will use our balance sheet to grow through mergers and acquisitions (M&A) across the three major markets (the US, the UK and India) we operate in. The acquisitions have to be accretive in growth, they have to be accretive in revenue and they have to culturally fit with the company,” Mastek Group Chief Executive Officer John Owen told BusinessLine.

Mastek is looking to acquire companies with a strong Indian engineering heritage, strong delivery track record and reputation.

“It got to have a market synergy and it got to have cultural synergy. Our aspiration is to acquire 2-3 companies $30-50 million in the next 12 months,” Owen, who was appointed as Group CEO in 2016, said.

Digital ride

The company has some legacy IT, which would be diluted as a percentage, while the remaining is all digital. Every contract the firm takes now is digital.

“Of the three markets we operate in, India is a small contribution, with about 2 per cent of the total revenues coming out from India and I would like to see that going to about 10 per cent in the next three-four years. India is now the feeding ground for new technology and technology adoption, which used to be the West before,” he added.

At present, the UK contributes about 75 per cent of the company’s revenues and the US 23 per cent.

“Over the next three-four years, I would expect 45 per cent to come from the US, 45 per cent from the UK and 10 per cent from India. We are looking at all the new technologies such as Artificial Intelligence (AI), robotics, automation, Machine-2-Machine (M2M) learning and Internet of Things (IoT) among others here in India,” he added.

The company’s consolidated global income stood at ₹573 crore in FY17, ₹838 crore in FY18, while that in third quarter of FY19 was at ₹270 crore.

Mastek, which has a total headcount of about 2,200-2,300, intends to double it in the next two years.

 

Published on March 26, 2019

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