Advent International will acquire Israeli insurance software provider Sapiens International for $2.5 billion in cash, expanding the private equity firm’s presence in the insurance technology market as carriers increase adoption of artificial intelligence.
Sapiens develops core systems and digital platforms for insurers, including policy administration, claims and analytics. Advent said the acquisition will support further investment in AI-driven capabilities and cloud-based solutions.
Advent director Douglas Hallstrom (pictured above, left) said insurers are turning to technology to drive growth and profitability, and that the firm intends to work with Sapiens to accelerate investment in technology innovation, AI and customer-centric initiatives.
Sapiens shareholders will receive $43.50 per share in cash, representing a 47.5% premium over Tuesday’s closing price of $29.50. The company will become privately held once the transaction is completed. Existing shareholder Formula systems will retain a minority stake and said it plans to work with Advent to advance Sapiens’ transition to AI and software as a service.
The acquisition was announced alongside Sapiens’ second-quarter earnings.
Revenue for the quarter rose 3.5% year-on-year to $141.6 million, while GAAP net income attributable to shareholders fell 23.6% to $14.2 million. Diluted earnings per share were $0.25, down from $0.33 in the same period last year.
Gross profit reached $61.9 million, with gross margins stood at 43.7%. Operating income was $16.8 million for the quarter.
Sapiens president and CEO Roni Al-Dor (pictured above, right) said the company continued to execute on its strategic priorities during the second quarter, securing new contracts and strengthening customer relationships across life, property and casualty, and reinsurance segments.
He noted that the acquisitions of Advantage Go and Candella would bolster growth in the property and casualty and life sectors, with a focus on platform innovation, cross-selling, cloud adoption, and global expansion of life and annuities operations.
