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Guidewire to purchase Cyence
Posted on Monday, 09 October 2017 09:41
Guidewire Software is buying online insurance data science and cyber risk Software-as-a-Service (SaaS) provider Cyence for USD 275.00 million.
The consideration consists of USD 140.00 million net cash and 1.60 million newly issued shares of Guidewire common stock, 0.26 million of which will be deferred equity and subject to certain operating milestones.
Listed on the New York Stock Exchange since 2012, the acquiror expects the deal to complete early in its second fiscal quarter.
Guidewire’s share price increased following the announcement, with stock closing at USD 78.24 on 6th October, rising 1.0 per cent from USD 77.47 on 5th October.
The insurance services software developer, which is based in Foster City, California, is currently used by over 300 property and casualty (P&C) insurers and has 730 employees.
It posted net income of USD 21.22 million for the financial year ending 31st July 2017, up 41.7 per cent from USD 15.00 for the same period last year.
Cyence is headquartered in San Mateo, California and performs risk analysis for insurers in the P&C industry, with a focus on new hazards that have previously gone uninsured.
Co-founder Arvind Parthasarathi stated that the firm will benefit from “operational data and policy lifecycle support from Guidewire’s core systems,” following the transaction.
Marcus Ryu, chief executive of Guidewire, said: “As traditional actuarial approaches struggle to address the unique characteristics of emerging risks like cyber, Cyence’s next-generation approach will enable insurers to broaden the scope and value of the products their policyholders need.”
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 2,365 deals targeting US data processing, hosting and related services companies announced so far this year.
The 5.10 billion public takeover of West Corporation by Apollo Global Management in May was the most valuable of these deals.
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