SunGard strengthened its hold in the UK when Sherwood accepted a £65.1m offer for the company.

The offer price of 140p a share was at the lower end of expectations, as reported in Insurance Times two weeks ago.

It follows SunGard's move to snap up Guardian IT last year for £56m.

Chief executive Ray Davis was reported as saying he was looking for more deals in the UK.

Sherwood's chief marketing officer Martyn Lambert said the deal's valuation of the company was "fair".

"Clearly it's off from the heady days of the internet bubble, but £65m is roughly ten times earnings and is probably fair."

SunGard moved on Sherwood just after chief executive Mike Shinya announced he was considering taking the company private in an MBO that would have valued the company at about £50m, or between 115p and 120p a share.

Lambert said the deal gave Sherwood the scale it needed to cut its cost of sales.

Hard times supplying the general insurance sector were not about to end, he forecast.

And he played down the possibility of mass redundancies in the quest for savings.

"I don't think [staffing] changes would be drastic.

"When we start to look at where we can save costs,the first thought would be where the products overlap," he said.