Evosys Acquisition: Key Details, Impact, and What Comes Next

Mastek's acquisition of Evosys marks a significant milestone in the enterprise technology sector. This strategic move aims to enhance Mastek's digital transformation capabilities and expand its global reach. By integrating Evosys' expertise in Oracle Cloud solutions, Mastek positions itself as a formidable player in the digital services market, benefiting clients worldwide.

What Is Evosys?

Founded in 2006, Evosys specializes in Oracle Cloud solutions, offering comprehensive services in digital and cloud transformation. Their unique selling points include a strong focus on Oracle Cloud applications and a proven track record of successful implementations across various industries. Evosys differentiates itself through its deep expertise in Oracle technologies and its ability to deliver tailored solutions that drive business efficiency and innovation.

Who Acquired Evosys?

Mastek is a specialist in enterprise digital and cloud transformation, providing a wide range of services to modernize IT infrastructure and enhance digital experiences. Key offerings include Digital Engineering & Experience, Data, Automation & AI, Oracle Cloud, and Salesforce services. Mastek also offers products like icxPro and iLeaseFinPro. Recognized as a leader in digital transformation services for mid-market enterprises, Mastek has strategic partnerships with major technology providers, enhancing its market influence across various industries.

When Was Evosys Acquired?

Mastek acquired Evosys on February 8, 2020. This acquisition came at a time when the digital transformation market was rapidly evolving, with companies seeking to enhance their cloud capabilities. The timing reflects Mastek's strategic intent to bolster its digital transformation services by integrating Evosys' expertise in Oracle Cloud solutions, positioning itself to better serve a global clientele amidst increasing demand for cloud-based services.

Why Was Evosys Acquired?

• Market Expansion: The acquisition of Evosys allows Mastek to diversify its geographic concentration and expand its portfolio of services to a broader market. This strategic move opens up access to Continental Europe, the Middle East, and the USA, reducing Mastek's reliance on the UK market.
• Technology Integration: Evosys brings strong Oracle competencies, including all Oracle Cloud Pillars with 17 specializations. This integration enhances Mastek's digital transformation offerings, leveraging Evosys' expertise in Oracle Cloud, ERP Cloud, and AI/ML solutions to accelerate digital transformation for clients globally.
• Competitive Advantage: The combination of Mastek and Evosys increases the addressable market for both companies with no overlap of capability, providing upside potential. The acquisition positions Mastek as a significant player in the Oracle cloud ecosystem, enhancing its competitive advantage by leveraging Evosys' established sales channels and reputation in both the public and private sectors.

Acquisition Terms

• Acquisition Price: The total acquisition price for Evosys was $138 million. The Middle East business of Evosys was valued at $65 million.
• Payment Method: The transaction was a combination of cash and stock. Specifically, the Indian, USA, UK, and RoW businesses of Evosys were acquired for 15% of Mastek shares to Evosys promoters. Additionally, Evosys promoters will hold 30% Compulsorily Convertible Preference Shares (CCPS) in a wholly-owned subsidiary of Mastek.
• Key Conditions or Agreements:
  • The acquisition was structured in two stages:
    • Stage 1: The Indian, USA, UK, and RoW businesses of Evosys merged with a wholly-owned subsidiary of Mastek.
    • Stage 2: The Middle East business of Evosys was acquired by Mastek UK Ltd.
  • Mastek promoter shareholding dropped to 39% post-acquisition.
  • The acquisition is subject to customary regulatory approvals and closing conditions.
  • Key personnel from Evosys, including Founder and CEO Umang Nahata and Co-Founder and COO Rakesh Raman, joined the Mastek management team.

Impact on Evosys

The acquisition of Evosys by Mastek has led to significant changes in operations and management. Key personnel from Evosys, including Founder and CEO Umang Nahata and Co-Founder and COO Rakesh Raman, have joined the Mastek management team, ensuring a smooth integration of both companies' expertise. This strategic move aims to enhance Mastek's digital transformation capabilities, leveraging Evosys' strong Oracle competencies. The operational changes are designed to create a more cohesive and efficient organization, capable of delivering comprehensive digital solutions to a global clientele.

In terms of product offerings and services, the acquisition has expanded Mastek's portfolio, particularly in Oracle Cloud solutions, ERP Cloud, and AI/ML services. This integration allows Mastek to offer a broader range of digital transformation services, enhancing its competitive edge in the market. Employee reactions have been generally positive, with many seeing the merger as an opportunity for growth and innovation. Customers, too, have responded favorably, appreciating the enhanced service capabilities and the promise of more robust, end-to-end digital solutions. For founders considering business transitions, tools like Sunset can assist in managing such processes compliantly, ensuring a smooth and efficient transition.