Mindtree to acquire US based Discoverture for Rs 94 cr

Acquisition to strengthen presence in property & casualty services industry

After a gap of over four years, midsized IT services company Mindtree is back to making inorganic play. The Bengaluru-based company said it has entered into a definite agreement to acquire US-based Discoverture Solutions LLC, a provider of insurance solutions for a consideration of around $15 million (around Rs 94 crore).

The all-cash transaction to be payable over the next 18 months and earn outs based upon achieving the revenue targets would be paid through internal accruals, the company said.

Founded in 2002 and headquartered in Scottsdale, Arizona, Discoverture provides services and solutions to global insurance companies in areas of property and casualty (P&C). The company presently employs around 300 professionals of which around 230 are located at its centre's in Infocity, Bhubaneshwar. Apart from the US and India, the company has also presence in the UK and Canada.

"Globally, the P&C insurance market is estimated to be in the range of $1.2-1.5 million. The acquisition of Discoverture will accelerate our journey to be amongst the top-3 service providers in the global property & casualty services industry," said Krishnakumar Natarajan, CEO and MD of Mindtree.

Mindtree derives around 27 per cent of its overall revenues from the banking, financial services and insurance (BFSI).

At present, Discoverture operates in an annual revenue run-rate of around $14 million, and Mindtree expects its contribution to the company's revenues in the Q4 FY15 revenues of FY15 will not be significant. The company's profitability is also in the same range as that of Mindtree.

After its acquisition of Kyocera Wireless (which it made in 2009) failed to meet the desired results, Mindtree had been going slow on its inorganic plan. The last acquisition it had made was in 2010 when it acquired Chennai-based privately-held remote infrastructure management services provider 7Strata.