Quindell acquires iter8

Acquisition marks Quindell's entry into North American insurance market

Quindell Portfolio Plc, a UK-based provider of expertise in software, consultancy and technology enabled outsourcing, has acquired iter8 Inc.

The acquisition marks Quindell’s entrance into the North American insurance market.

Read: Profile of iter8 from our February 2011 issue

Quindell purchased iter8, the Software as a Service (SaaS) provider, for £2.5 million in cash, a further payment of cash of £2.5 million in April 2014 and the issue over a three-year period of 90,285,713 Quindell shares in three equal annual instalments commencing April 2014.

Read: Top 5 M&A deals of 2012

Once issued over the three-year period, this will increase the total number of shares in issue by 2.3% to 4,091,161,623.  Based on the agreed valuation of £20.8 million the transaction gives an implied value of 17.5 pence per Quindell share.

In return, the vendors of iter8 have delivered a business plan that will see iter8 delivering run rate profit after tax of circa £3 million by the end of 2013, according to a Quindell press release. The acquisition is expected to be profitable and cash generative in 2013 and to significantly enhance earnings in 2014 once investments in the North American market start to accelerate market share of new business technology wins versus the Group’s competitors.

Read: Real-Time Real Deal?

“We are thrilled to be announcing this acquisition and to be welcoming the Iter8 team into the Quindell group. Iter8 has been successfully providing insurance customers in the North American market with SaaS based solutions for more than a decade, and their experience and standing in this market provides us with an excellent platform on which to base the expansion of our insurance technology into North America,” said Rob Terry, chairman and chief executive of Quindell, in a press release.

“Having worked closely with Guidewire on a number of implementations we have been extremely impressed by Quindell’s technology capabilities and their knowledge of insurance best practice.  With our two technology sets now integrated and first client implementations contracted we are very confident that we can use our knowledge and standing within the North American market to excellent effect to accelerate Quindell’s technology and outsourcing growth in North America over the coming years,” said Tim Scurry, co-founder and executive vice-president of Iter8.

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