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Sapiens to buy StoneRiver for $102m

Published 16 February 2017

Sapiens International has agreed to acquire privately held StoneRiver for nearly $102m in cash, subject to certain adjustments.

StoneRiver delivers a wide range of solutions and services for the insurance industry in North America.

Headquartered in Denver, Colorado, StoneRiver's versatile product portfolio is comprised of a policy administration suite, rating, underwriting, illustrations, reinsurance, and finance & compliance solutions for all major insurance business lines, across both property and casualty (P&C) and life and annuities (L&A).

StoneRiver's rich set of solutions complements Sapiens' existing offerings, and will allow Sapiens to accelerate its growth in the U.S. market and globally. StoneRiver currently services more than 200 U.S. insurance customers, and has a team of approximately 500 insurance professionals.

Sapiens president and CEO Roni Al-Dor said: "Joining forces with StoneRiver significantly expands Sapiens' presence and scale in the North American insurance industry, and specifically helps us further accelerate our growing market footprint in the U.S. P&C space.

"Moreover, the deal is closely aligned with our M&A growth strategy that is centered on three key factors: growing our customer base, expanding geographically and adding complementary solutions to our portfolio - all while we ensure our continued high quality of services and product delivery. StoneRiver is an acquisition that meets all of our criteria. In the past six years Sapiens completed and integrated successfully eight acquisitions."

Al-Dor said: "Sapiens is confident that with StoneRiver, we strengthen our position as a leading innovative global software solutions provider, offering end-to-end solutions to the global insurance industry. We look forward to welcoming the StoneRiver team and combining best practices and capabilities, which will create greater value for our mutual customers and shareholders."

Celent's North America property/casualty practice director Donald Light said: "The continuing wave of insurance technology M&A activity demonstrates how insurance companies value working with providers who offer a full suite of solutions.

Sapiens' acquisition of StoneRiver is a major step forward in its global growth. This acquisition broadens and deepens Sapiens' ability to enable US insurers as they continue their digital and modernization journeys."

The acquisition of StoneRiver expands Sapiens' North American P&C portfolio with StreamSuite, a state-of-the-art insurance suite targeting the higher tier carriers, complementing Sapiens' Stingray solution that is targeting the lower tier in the sector.

The company will also gain entry into the workers' compensation sector, a new area for Sapiens. Combining Sapiens' and StoneRiver's reinsurance solutions is expected to create a comprehensive market offering and will allow Sapiens to better serve its customers.

Sapiens L&A offering will be enhanced by StoneRiver's stand-alone products in illustration (LifePortraits), eApp (Life Apply) and underwriting (Life Suite). The addition of these products to the Sapiens ALIS software suite, together with the company's digital suite that includes Sapiens Intelligence and Sapiens Portal, will enable Sapiens to offer a comprehensive and even stronger portfolio of solutions to the life and annuities sector.

StoneRiver president and CEO Gary Anderson said: "We are excited to join Sapiens, a leading software solution provider with a rich 30-plus years of history and proven experience delivering enterprise-scale technology globally. Like StoneRiver, Sapiens is focused on the insurance industry and delivering high value end-to-end solutions of core products and services.

“Sapiens' scale, financial strength, industry relations and innovative technologies will be a great benefit to current StoneRiver customers and will open up new opportunities for our employees and partners. We look forward to working with Sapiens to achieve a seamless transition and to significantly expand Sapiens' North American presence."

StoneRiver estimated Non-GAAP full year 2016 revenues are $80m and the company is profitable. Sapiens' management expects this transaction to be accretive to earnings starting with the third quarter of 2017.

The transaction is expected to be completed by the end of the first quarter of 2017. Upon completion, StoneRiver will become wholly owned by Sapiens.

Sapiens will provide full-year 2017 guidance for the combined organizations when reporting 2016 annual results at the end of February 2017.



Source: Company Press Release