(Image source: V-NEO homepage.)
GFT Technologies SE, a Stuttgart, Germany based vendor and consultant to the financial services industry, has approved the full acquisition of all shares of V-NEO Inc. (Quebec) a provider of IT solutions to the insurance industry with clients in Canada, Belgium and France. V-NEO has also acted as a service partner for the insurance platforms Guidewire and Oracle OIPA. The acquisition enables GFT to enter the Canadian insurance market, expand its market position in North America and gain a new site in Belgium.
“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,” comments Marika Lulay, CEO, GFT Technologies SE.
Founded in 2011, V-NEO employs 160 people at its three sites in Quebec, Toronto and Brussels. The company is expected to generate revenues of around EUR 15.5 million in the current financial year (1 August 2017 to 31 July 2018). Earnings before taxes (EBT) is expected to reach approximately EUR 2.6 million.
The two companies agreed not to disclose the purchase price, which GFT reports will be paid in cash. 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 EUR 7 million for this financial year. Due to the acquisition-related expenses, V-NEO will not make a significant contribution to GFT earnings in 2018. GFT says that further details will be disclosed in its half-year Financial Report published on 9 August 2018.
“The acquisition underpins our international growth strategy and medium-term forecast for 2022,” adds GFT’s Lulay. “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.”
In its announcement about the acquisition, GFT stresses V-NEO’s expertise, particularly with regard to digital solutions for property/casualty and life insurance. The Canadian company offers both strategic consulting as well consultation through 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,” the GTF announcement says.
The acquisition allows GFT 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.
“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,” comments Alain Lamothe, CEO, V-NEO. “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.”