GFT acquires Canadian IT specialist V-NEO, focused on the insurance industry
GFT Technologies SE (GFT) approved the full acquisition of all shares of V-NEO Inc. (V-NEO), based in Canada. The company is an experienced services provider of integrated IT solutions for the insurance industry. Its clients include numerous major insurers in Canada, Belgium and France. V-NEO has also acted as a service partner for the insurance platforms Guidewire and Oracle OIPA. Founded in 2011, the company employs 160 people at its three sites in Quebec, Toronto and Brussels. With the acquisition of V-NEO, GFT strengthens its expertise in the insurance sector, expands its market position in North America and gains a new location in Belgium.
The company is expected to generate revenues of around CAD 23.5 million in the current financial year (August 1, 2017 to July 31, 2018). Earnings before taxes (EBT) is expected to reach approximately CAD 4.3 million. The purchase price will be paid in cash and the two parties agreed not to disclose the purchase price. The full transfer of shares is scheduled for the end of July 2018. As a result of the first-time consolidation in August 2018, GFT expects additional revenues of around CAD 11 million for this financial year. Due to the acquisition-related expenses, V-NEO will not make a significant contribution to GFT earnings in 2018. Further details will be disclosed in the Half-year Financial Report published on August 9, 2018.
At the contract signing, Marika Lulay, CEO of GFT Technologies SE, stressed that: "The acquisition underpins our international growth strategy and medium-term forecast for 2022. The technological know-how and the client base of V-NEO are a perfect fit for GFT – as are its highly skilled on-site client consultants in North America and Europe, as well as the nearshore development teams in Canada."
Reinforcement with regard to property, casualty and life insurance
The insurance industry is facing enormous challenges in the midst of the digital transformation process. According to Gartner, only a few insurers worldwide have initiated their digital transformation so far; and such changes can take up to ten years to achieve. V-NEO has in-depth expertise – especially regarding digital solutions for property, casualty and life insurance. This includes both strategic consulting as well as all steps from initial design to the implementation of solutions. The company boasts a high customer loyalty rate with national and international clients, driven by its bespoke architecture enterprise solutions and projects for process optimization and digital transformation. With this acquisition, GFT is able to complement its current services portfolio for property and casualty insurance with expanded and new solutions for the life insurance sector. V-NEO has already received numerous innovation awards for its agile integration of Guidewire services. As one of the largest independent North American services providers for the Guidewire insurance platform, the company currently generates around two-thirds of its revenue with this offering. V-NEO also works on a major Canadian life insurance project with OIPA Oracle platform. These services will now be combined with GFT's existing insurance services in order to expand its international client base.
Innovation in the DNA of both companies
V-NEO was the first North American firm to initiate an 'Insurance Innovation and Performance Center', which is specifically designed for innovation development and the training of employees in the insurance sector. The center puts into practice the development, piloting and market roll-out of new insurance solutions involving all aspects of artificial intelligence and the Internet of Things. Combined with the existing global Digital Innovation Labs of GFT, the innovation management within GFT will be enhanced and taken to the next level.
Diversification of client portfolio
Alain Lamothe, CEO of V-NEO stated that: "With our deep insurance know-how and our technological skills, we are not just a perfect fit for each other, but will also help diversify GFT's customer portfolio with our long-lasting client relationships. The international GFT presence enables us to recognize global industry trends at an early stage, tapping into the market potential together, both with our clients and our partners."
Lulay added: "The acquisition of V-NEO is a decisive step towards positioning GFT as a leading IT partner for the digital transformation of the insurance industry, as it is already for the banking sector."