NIIT Technologies on Monday announced the acquisition of UK-based insurance solution provider ROOM Solutions for $25 million in an all-cash deal.
MUMBAI: NIIT Technologies on Monday announced the acquisition of UK-based insurance solution provider ROOM Solutions for $25 million in an all-cash deal. The IT solutions provider said it has acquired 51% stake and would buy the remaining 49% over the next 18 months.
“The final cost of the acquisition would not exceed one time sale of ROOM,” the official said, indicating that the acquisition bill would be under $25 million.
ROOM Solutions is a 120-people, $25-million company, a senior NIIT official informed. It is focused on the commercial insurance market including IT solutions for customers of Lloyd’s, the largest reinsurance market in the UK. Over a quarter of Lloyd’s business is processed on the core policy administration platform ‘Subscribe’, which has been developed by ROOM Solutions.
“ROOM is a profitable company, both at the operating level as well as at the PAT (profit after tax) level. The move would strengthen our presence in the insurance vertical. While we are largely in the life and pension area, ROOM has a strong presence in the general insurance space and has a strong IPR (intellectual property right) platform,” the official said.
The company would become a fully-owned subsidiary of NIIT Technologies, which plans to fund the acquisition through debt and internal accruals.
ROOM also has a $18 million line of credit from banks, Arvind Thakur, chief executive officer of NIIT Technologies pointed out. “We will acquire companies that strengthen our base in industry verticals,” he said.
"NIIT Technologies' expertise in providing technology-based solutions in the insurance space will expand our service offerings to the Room customer base and improve our value proposition through the established global delivery model of NIIT Technologies," Room Solutions Founder Marcus Broome said.
In the immediate term, NIIT would expand its offerings in the IT and BPO space using ROOM's product.— With PTI
Plum deal
ROOM Solutions is focused on the commercial insurance market
The UK firm has revenues of $25 million and has 120 employees
NIIT Tech would fund the acquisition through debt and internal accruals
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