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Zensar to acquire insurance-tech company Cynosure for $33 million
News | 22 Mar 2018
MUMBAI, MARCH 21
Mid-tier IT services firm Zensar will acquire US-based insurance-tech company Cynosure for $33 million, to expand its foothold in the fast-growing property and casualty insurance space.
Cynosure focusses on providing ‘Guidewire’ platform implementation services to property and casualty (P&C) insurance carriers, and had revenues of about $20 million in 2017. The Guidewire platform is a large insurance platform that allows insurance companies to integrate various insurance practices and allows them to go digital.
“Cynosure is an integral part of our return-to-digtial strategy,” Sandeep Kishore, CEO and MD, Zensar, told BusinessLine. “Insurance is 15 per cent of our business, and this acquisition will help us grow it. Moreover, property and casualty insurance is a $2-trillion sector globally, growing much faster than life insurance. We already have 1,200 people working under our insurance practice.” Kishore said the overall cost of acquisition will be $33 million, plus some earnouts, which will be based on business performance and goals. “Cynosure is a Guidewire partner, and is well-respected in the marketplace, making it an expert in this area. It brings successful implementations, providing core system modernisation with rich customer relationships that will serve as a significant value addition to our offerings,” Kishore said.
Zensar Technologies Ltd will acquire the entire share capital of Cynosure Interface Solutions (Cynosure India), and the former’s wholly owned subsidiary, Zensar Technologies Inc, will acquire the entire share capital of Cynosure Inc. Cynosure Inc is headquartered in Chicago. Cynosure India is headquartered, and has an offshore development centre, in Bengaluru. The acquisition will be funded by a mix of internal accruals and external debt.
This is Zensar’s third acquisition in less than 18 months as the company tries to pivot majority of its business towards digital technologies such as automation, machine learning, artificial intelligence and blockchain. In November 2016, Zensar acquired Foolproof and three of its subsidiaries for an undisclosed sum, to build its digital portfolio. Four months later, it acquired Keystone Logic Solutions, a Bengaluru-based digital supply chain company, for an undisclosed amount.
Through a mix of acquisitions and organic growth, Zensar has begun generating over 38 per cent of its business from the digital space.
Harsh Goenka, Chairman of RPG Enterprises and Zensar, said: “Insurance is one of the focus areas for Zensar. The combined capabilities of Cynosure, with its industry-leading Guidewire capabilities in the P&C insurance sector, and Zensar’s digital expertise will augment the company’s growth.”
“As part of Zensar, we have the opportunity to offer more robust integrated solutions combined with its digital transformational and infrastructure capabilities. Our expertise in Guidewire platforms have enabled our customers in the P&C insurance space to reap long-lasting benefits which is now fortified by this combined entity.” said Sid Wadhwa, CEO and co-founder, Cynosure.
Post the acquisition, Cynosure will continue to be managed by its founders. The management and team of Cynosure in the US and Bengaluru, will become a part of Zensar’s insurance vertical.