Majesco, a provider of core insurance systems and services, has entered a merger agreement with Cover-All Technologies Inc., an insurance software company, in a 100 percent stock-for-stock transaction. The combined entity will retain the Majesco brand. The merger is the most recent step in Majesco’s aggressive growth strategy to consolidate its insurance business under a single and separate entity, the company said. Majesco signed an agreement
“At Majesco, we take a customer-centric approach to enabling technology transformation for our customers,” said Ketan Mehta, CEO and founder of Majesco, who will serve as President and CEO of the combined entity. “We maintain a laser sharp focus on meeting the needs of just one industry insurance, and are making investments that add capability and capacity to serve our customers in meeting their growth objectives. Cover-All Technologies is a well-known and respected insurance software company with in-depth knowledge of commercial ISO lines.”
Cover-All’s stockholders, and holders of options and restricted stock units will receive 16.5 percent of the outstanding shares of common stock of the combined company, on a fully diluted basis, upon the closing of the merger.
“Scale has always been a plus in the insurance software business,” said Donald Light, director of Celent’s Americas P&C insurance practice. “It speaks to a demonstrated ability to create and maintain insurer relationships. Technology firms with more customers have broader and deeper IP; and more resources to invest in getting better. That said, size alone is no guarantee of success. Smarts and agility and foresight are not correlated with size.”
The combined company, Majesco, is expected to have more than $100 million in estimated annual revenue with high growth potential and more than 150 insurance customers in all tiers served by a global delivery team. The company will offer life insurance, annuity and group benefits product offerings, a consulting practice, bureau content services offering with extensive knowledge of ISO and NCCI, business intelligence and data analytics solutions with customer-focused consulting and services practice, and cloud solutions for core insurance systems, which already are deployed to more than 30 customers.
“Cover-All and Majesco have highly complementary core strengths, including a broad product portfolio, passionate people committed to world-class software and impactful customer services exclusively focused on insurance industry,” said Manish Shah, Cover-All’s president and CEO. “We are particularly excited because, as a larger company, we will have better resources including expanded scale to meet the needs of any insurer regardless of size or location, and improved financial strength to invest in innovative and new products. We believe that this merger will significantly enhance shareholder value by allowing Cover-All shareholders the ability to participate in the growth of the combined company."
The transaction is subject to customary closing conditions, including the filing and effectiveness of a registration statement with the Securities and Exchange Commission, Cover-All stockholder approval, certain regulatory approvals and that the shares of Majesco common stock be listed on the NYSE MKT, the companies said. The transaction is expected to close in the second quarter of 2015. Both companies will continue to operate as independent entities until then.
