Mastech Reorganization, Name Change Sends Shares Up (Update4)
3/7/00 1:25:00 PM
Source: Bloomberg News
(Updates with closing share activity.)
Pittsburgh, March 7 (Bloomberg) -- Mastech Corp., a computer- technology consultant, split into nine units that will offer Internet-related services under a new holding company called iGate Capital Corp., sending the shares up 49 percent.
The shares of iGate Capital rose 21 1/4 to 64 3/16 in Nasdaq Stock Market trading of 6.1 million, almost 13 times the three- month daily average. It was the eighth-largest percentage gainer on Nasdaq.
The change was made to keep pace with rapid technology changes and growth in electronic commerce, iGate said. The company plans to double the number of operating divisions by the end of the year, with the idea of eventually selling shares to the public, Chief Executive Sunil Wadhwani said.
'IGate is a natural evolution of the family of Mastech,' said analyst Andrew Steinerman of Bear Stearns & Co. 'The reason I say family is, while it's one company, it's always been growing companies. This time around, the business units they create will be separately branded.'
Wadhwani, who helped start the company 12 years ago, said iGate is planning public offerings of its Emplifi Consulting and Mascot Systems units within the next three months. Three or four other offerings are planned in the next year.
IGate also said it's starting a $75 million venture fund, iGate Ventures, to buy small stakes in other companies.
Steinerman said iGate will be different than a typical venture capital firm because of its focus on one industry and shared resources, especially its efforts to recruit employees from around the world.
The company, based in the Pittsburgh suburb of Oakdale, Pennsylvania, had $470 million in 1999 revenue and has about 1,000 clients around the world.
The holdings include wholly or majority-owned Emplifi Consulting, Mascot Systems, Enterprise Network Solutions, iGate Europe, eJiva, IRG Inc. and Extranet; along with Symphoni, a joint venture with ad agency Wolf Group; and iProcess, a joint venture with General Electric Co. |
