Solera Holdings Goes To Vista Equity Partners For $6.5 Billion

Vista will pay $55.85 a share in cash for the Westlake, Texas-based company, said the person, who asked not to be identified because the matter is not public.

Private equity firms have been active buyers of insurance services providers, attracted by their resilience in financial downturns.

The transaction follows Solera Holdings’ statement last month that it has set up a special committee to explore strategic alternatives.

The merger will be financed through investment provided by Vista partners including Koch Equity Development and an affiliate of Goldman Sachs & Co., as well as existing and new debt financing. (SLH) that is now going into the arms of Vista Equity Partners for .5 billion in one of the largest go-private transactions this year, The Deal has learned. According to the terms of the deal, the buyout will include the net debt that Solera Holdings has accumulated so far.

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.

“We believe an acquisition by private equity is the most desirable result for shareholders as it “pulls forward” value which would likely have taken several years to manifest”, SunTrust Robinson Humphrey analyst Andrew Jeffrey wrote in a note Monday. Omnitracs provides fleet management software applications for the transportation industry while the latter makes cloud-based relationship management solutions for the automotive industry.

According to Solera’s website, the company’s clients include the 10 largest insurance companies in Europe and the United States.

This would be the biggest acquisition ever for Vista, topping the $4.2 billion purchase of Tibco Software Inc. past year . The stock gained $4.21, or 8.5 percent, to close at $53.66.

But some industry sources have suggested that Solera may have been too aggressive in tapping into new areas through acquisitions and investments, which have hurt its margins. The deal, which is at $3.74 billion excluding debt, is projected to be closed in the first quarter of 2016.