Vista Equity Partners will acquire Solera Holdings in a transaction valued at $6.5 billion, which includes Solera’s existing debt. Other investors include an affiliate of Koch Equity Development LLC, which is the investment and acquisition subsidiary of Koch Industries Inc., and an affiliate of Goldman, Sachs & Co.
Vista Equity Partners will acquire 100 percent of the outstanding shares of Solera common stock for $55.85 per share in cash. Solera owns LYNX Services, GTS and Glaxis.
Koch Industries acquired a stake in Guardian in late 2012.
“The purchase price represents an unaffected premium of 53 percent over Solera’s closing share price of $36.39 on August 3, 2015,” according a statement from Solera.
The closing of the deal is reliant upon the approval of Solera stockholders and required regulatory approvals. It is expected to close no later than the first calendar quarter of 2016.
Solera’s board of directors, following the receipt of the unanimous recommendation of a special committee of independent directors of the Solera board, unanimously approved the deal and recommended that Solera stockholders vote in favor, according to a company statement.
“This transaction delivers immediate compelling value to our stockholders and represents a pivotal milestone for Solera in partnering with Vista,” says Tony Aquila, Solera’s founder, chairman and CEO. “It not only recognizes our innovative company and talented employees, but also provides us with the optimal flexibility to proliferate our world-class solutions and services for our customers. We are extremely excited about working with Vista to further strengthen Solera’s global leadership in risk and asset management technologies.”
“We are thrilled to be partnering with Solera,” adds Robert F. Smith, Vista’s founder, chairman and CEO. “For almost half a century, Solera has been serving the insurance and automotive industries with innovative software and information solutions. With the portfolio of products the company has built and acquired, combined with the vision of its leadership, we believe Solera is incredibly well positioned for the next fifty years. The mission is clear and the opportunity is there to continue to transform how physical assets are managed and insured.”
The deal will be financed through a combination of common and preferred equity contributions by investment funds affiliated with Vista, Koch Equity Development, and an affiliate of Goldman, Sachs & Co., and existing debt financing, as well as new debt financing that has been committed to by Goldman Sachs Bank USA and Goldman Sachs Lending Partners LLC. The deal is not subject to any financing condition.
Rothschild, Inc. is serving as financial advisor to Solera, and Kirkland & Ellis LLP is serving as legal advisor to Solera. Centerview Partners LLC is serving as financial advisor to the Special Committee, and Sullivan & Cromwell LLP is serving as legal advisor to the Special Committee. J.P. Morgan Securities LLC is serving as financial advisor to Vista, and Simpson Thacher & Bartlett LLP is serving as legal advisor to Vista.
“With more than $14 billion in cumulative capital commitments, Vista seeks to partner with world-class management teams looking to reach their full potential,” according to the company’s website. “We understand the software business model and have developed specific operational improvements (the Vista SOPs) to create value, and we combine this operational capability and understanding with a unique, long-term perspective. This combination encourages optimal business decisions, enables the pursuit of operational excellence, and drives maximum value creation for all shareholders.”
Solera had announced in late August it was “exploring a variety of strategic alternatives,” including a possible sale of the company.
Pittsburgh Glass Works (PGW) announced the sale of its Insurance and Services Division (I&S), which included LYNX Services, GTS and Glaxis, in May 2014.
LYNX Services’ president John Wysseier said the deal was “good news.”
“The May 12 announcement of Solera having executed an agreement to acquire LYNX Services, GTS Services and Glaxis from Pittsburgh Glass Works (PGW) is being greeted as good news by our contacts in the insurance and automotive industries,” said Wysseier at the time. “Solera is a well-known and respected provider of technology and services to the markets we serve, so the opportunities for synergy and customer-facing benefits are many.
“At the same time, we anticipate that the strategic relationship between Solera and PGW will provide opportunity and mutual benefits in terms of technology, parts and services within the auto replacement glass vertical, so we look forward to an active pursuit of these benefits on behalf of all clients and constituents,” he adds.
During a November 2014 quarterly earnings conference call, Aquila called glass a $2 billion market opportunity.
Officials from LYNX Services, Solera Holdings and Vista Equity Partners had not yet responded to requests for comment at press time.