Transaction highlights our long term relationship model
We are very pleased to announce that The Chesapeake Group has advised ZenSar Technologies on its acquisition of Cynosure. The transaction consideration consists of an upfront cash payment of $33 million, plus performance-linked earnouts.
ZenSar Technologies is a leading digital solutions and technology services company that specializes in partnering with global organizations across industries on their Digital Transformation journey. ZenSar Technologies has nearly 8,500 associates globally, more than 215 customers, and 29 offices across the APAC, US, UK, Europe, South Africa and Middle East regions. ZenSar Technologies reported revenues of $466 million for the 12 months ending December 2017. ZenSar Technologies is part of the $2.9 billion RPG Group headed by Harsh Goenka. RPG hired Sandeep Kishore as ZenSar’s CEO in January 2016 to lead the company and its strategic initiatives.
Cynosure focuses on providing Guidewire platform implementation services to Property and Casualty (P&C) insurance carriers. Cynosure reported revenues of $20 million for its latest fiscal year ended December 31, 2017. The company has more than 150 associates across the US and a delivery centre in Bangalore, India.
Transaction rationale:
Platform based digital solutions: The acquisition will strengthen ZenSar’s capabilities in platform-based services for the Insurance vertical. Implementation of the Guidewire solution provides a foundation for Insurance players to adopt digital. The acquisition is part of ZenSar’s ‘Return on Digital’ strategy that creates significant business impact for clients through scalable digital transformation programs.
Strong geographic presence and cross selling opportunities: Cynosure’s presence in the US will help ZenSar expand its customer reach across the North American geography. Zensar will also derive significant cross selling opportunities for its UK-based clients.
Strong partnership with Guidewire: Cynosure is one of Guidewire’s select partners; this designation will help ZenSar leverage the increasing demand for this specialized insurance solution.
Experienced management: Cynosure is led by ex-Guidewire professionals who have taken part in core product upgrades and large implementations.
Expand Insurance vertical: The Insurance vertical currently accounts for 15% of ZenSar’s revenue, this will increase to 19% post-acquisition.
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 Property & Casualty Insurance sector and ZenSar’s digital expertise will augment the company’s growth.”
Sandeep Kishore, Chief Executive Officer and Managing Director of ZenSar said, “The digitalization of the insurance sector with reference to its products, sales channels and consumer engagement is increasingly driven by digital technologies. Cynosure is a Guidewire partner, and is well respected in the market place, making them experts in this area. They bring successful implementations, providing core system modernization with rich customer relationships that will serve as a significant value addition to our offerings.”
This transaction highlights Chesapeake’s long-term relationship model. As one of the only firms that focuses as much on buy-side advisory as sell-side advisory, we invest in building and maintaining relationships with our buy-side clients, often acting as an extension of their in-house corporate development teams. Chesapeake has been working with ZenSar Technologies for more than a decade and Cynosure is the third transaction for which Chesapeake has advised ZenSar.
Ajay Bhandari, Chief Corporate Development Officer of ZenSar noted, “ZenSar has a long working relationship with the team at Chesapeake. We value their ability to help us proactively find and execute acquisitions that are in line with our strategic growth plans.”
Chesapeake initiated discussions with Cynosure on ZenSar’s behalf nearly 3 years ago. When Cynosure decided to evaluate strategic alternatives, ZenSar was a known credible partner. Prior to Cynosure, Chesapeake advised ZenSar on its acquisition of an Infrastructure Management services company in 2010 and an Oracle focused system integrator in 2007. Throughout our 30-year history, Chesapeake has demonstrated an ability to work with large enterprises to identify and execute strategically important acquisitions, including with companies that are not actively on the market.