Solera Holdings, which moved its corporate headquarters to Westlake from San Diego several years ago, agreed to be acquired by an affiliate of private equity firm Vista Equity Partners for about $3.74 billion in cash.
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Shareholders will receive $55.85 for each share they own. The total valuation of the deal including Solera’s net debt is said to be worth $6.5 billion.
To view the full article, register now. The deal is the largest in Vista’s history, the person said.
“This transaction delivers immediate compelling value to our stockholders and represents a pivotal milestone for Solera“, Solera’s founder, chairman and chief executive Tony Aquila said in a news release.
Reuters adds that private equity firms like Verizon Equity have been actively buying insurance service providers. The financing for the deal will come from varies outlets besides the Vista, firms like Koch Equity Development, and an affiliate of Goldman Sachs Group Inc.
Vista is a private equity firm that is based in the United States.
Following the receipt of the unanimous recommendation of a special committee of independent directors of the Solera board, Solera’s board of directors unanimously approved the Merger Agreement and the merger, and recommended that Solera stockholders vote their shares in favour of the merger.
Last month, Solera Holdings announced that it was exploring a variety of strategic alternatives.
“We are thrilled to be partnering with Solera”, said Robert F Smith, Vista’s founder, chairman and CEO. “For nearly half a century, Solera has been serving the insurance and automotive industries with innovative software and information solutions”.
Solera was founded in 2005 and processes more than 230 million insurance transactions each year, according to Bloomberg. Previously, Vista acquired Tibco Software Inc. for $4.2 billion.
Industry sources said then that there was unease with Solera’s story in the public markets, partly because of its aggressive push into new areas through acquisitions and investments, which have subsequently hurt the company’s margins. Revenues increased 15.6 percent to $1.14 billion.
SLH shares were up 8% as of Monday afternoon.
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Subject to customary closing conditions and regulatory approvals, the deal is expected to complete by the end of the first quarter of 2016.
