Shares of IT firm Mastek zoomed 20 per cent today following reports that Majesco, the insurance arm of the company, has entered into a definitive merger agreement with Cover-All Technologies.
Mastek's scrip surged 19.99 per cent to settle at Rs 324.80 -- its upper circuit limit at the BSE.
At the NSE, it soared 20 per cent to Rs 325.20.
The market valuation of the company climbed Rs 124 crore to Rs 726.90 crore.
Majesco (formerly, MajescoMastek) has entered into a definitive merger agreement with Cover-All Technologies Inc in a 100 per cent stock-for-stock transaction, Mastek said in a filing to the BSE.
Majesco is the global provider of core insurance systems and services. Cover-All Technologies is an insurance software company based in Morristown, US.
The combined entity will retain the "Majesco" brand globally.
Cover-All's stockholders and the holders of its options and restricted stock units, in the aggregate, will, upon the closing of the merger, receive 16.5 per cent of the outstanding shares of common stock of the combined company, on a fully diluted basis, it said.
The transaction is expected to close in the second quarter of 2015. Both companies will continue to operate as independent entities until then.
The decision to merge the two businesses is the latest step in the execution of Majesco's aggressive growth strategy to consolidate its global insurance business under a single and separate entity.
The combined company, Majesco, is expected to have over USD 100 million in estimated annual revenue with over 150 insurance customers in all tiers worldwide.
