IKYA buys 49% stake in Canadian tech company MFXchange

BENGALURU: IKYA, a staffing company owned by Thomas Cook India, on Tuesday said it has agreed to buy a 49% stake in MFXchange, the technology applications subsidiary of Canadian property and casualty insurer Fairfax.

The company will combine MFX with its nearly $200-million IT services business, and has appointed Vikram Gulati, a Wipro veteran and most recently CEO of IT firm Happiest Minds, as its head.

This will mark IKYA’s foray into the multi-billion dollar outsourcing market dominated by IBM, Accenture, Tata Consultancy Services and Infosys.

As part of the transition, MFX CEO Ray Roy will retire and serve as a non-executive chairman, the company said.

“We wish Ray the very best in his retirement and trust that the business he built in MFX will be in good hands with Ajit Isaac, Vikram Gulati and the team at IKYA,” said Prem Watsa, chairman and CEO at Fairfax Financial, which owns Thomas Cook and through it IKYA.

In August this year Quebec’s security regulator started investigating Fairfax and its founder for “possible illegal insider trading”, a charge denied by the top executives including Watsa.

Ajit Isaac, managing director and chairman of IKYA, said despite all the competition there’s an opportunity to create another billion-dollar company in the IT services industry. “Fairfax has been a phenomenal backer for us—they actually came to us and suggested we integrate their IT subsidiary with IKYA,” he said.

Fairfax is expected to help IKYA gain a foothold in the lucrative insurance IT outsourcing market.

Gulati, a seasoned enterprise IT executive, led software applications services unit at Wipro and had stints at Intelligroup and Ashok Soota’s Happiest Minds Technologies.

“We are getting a cloud-enabled product being used by several insurers, a data centre in New York and understanding of the insurance vertical from Fairfax,” he said.

Gulati said his immediate task would be to scale to around $500 million in revenue. IKYA has made seven acquisitions so far. MFX marks its third acquisition this year.

In September, it had acquired Canada-based IT firm Brainhunter. “With Brainhunter we will be able to target the IT staffing market in the US,” Gulati said.