Acquisition of iter8 Inc. marks the arrival of Quindell, a specialist in providing SaaS-based solutions to the direct insurance and broker channels
Apr. 26, 2013 – Quindell Portfolio Plc, the provider of sector leading expertise in software, consultancy and technology enabled outsourcing in its key markets, being Insurance, Telecommunications and their related sectors is pleased to announce its entry into the North American Insurance market through the acquisition of Iter8 Inc., a leading Software as a Service based provider to the North American insurance broker and agent market.
The terms of the acquisition were satisfied by the immediate payment of �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. Once issued over the three year period, this will increase the total number of shares in issue by circa 2.3% to 4,091,161,623. Based on the agreed valuation of �20.8 million the transaction gives an implied value of 17.5p per Quindell share. In return, the vendors of iter8 have warranted a business plan which sees iter8 delivering run rate profit after tax of circa �3 million by the end of 2013. The acquisition is expected to be profitable and cash generative in 2013 and to be significantly earnings enhancing in 2014 once investments in the North American market start to accelerate market share of new business technology wins versus the Group’s competitors.
iter8 has a significant position in the North American market, and is particularly dominant in Canada as a result of its specialism in providing SaaS based solutions to the direct insurance and broker channels, which accounts for more than 70% of the Canadian insurance distribution market along with insurance agents. With over 40 major implementations for clients ranging from large multinational carriers including Aviva, Allstate, Allianz, Chubb, RSA, Wawanesa Insurance and Zurich to smaller niche players, iter8’s product lines include personal auto and property and commercial business owners, general liability, commercial packages, farm and specialty lines.
Post the acquisition of iter8, the Board is confident that Quindell will be able to replicate its UK growth rate in insurance technology sales in North America. As an illustration of this, since the publication of the November 2012 Celent report that recognised Quindell as a leader among European providers of Insurance Claims Systems, Quindell has brought on board more major new clients in the last four months than any claims vendor has in the last two years. This extensive growth is due to changes in requirements to support telematics, social media and regulatory compliance changes in the UK. At its release, the report stated that Quindell and Guidewire had brought on board more clients over the last two years than all their competitors, acquiring 23% of new deals, followed by SAP at 15% and Accenture at 5% followed by all other vendors. This illustrates the scale of Quindell’s growth in comparison to relevant competitors in both the UK and North American market.
“We are thrilled to be announcing this acquisition and to be welcoming the iter8 team into the Quindell group,” said Rob Terry, Chairman and Chief Executive of Quindell. “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. In addition to members of the team having worked together in 1990, the teams have worked closely over the past year to develop a pipeline of opportunities including those relating to the roll out of telematics based insurance models for the Canadian market with existing customers. On the basis of the considerable success being generated, we entered into a joint distribution agreement at the end of 2012. Having been able to work closely with them, we have confirmed that our two technologies are highly compatible and complementary, and we look forward to announcing new deals in this market in due course.”
Commenting on the acquisition, Tim Scurry, Co-Founder and Executive Vice President of iter8 said, “Iter8 is dominant in the Canadian broker and insurer market, and has significant presence in the USA. 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.”
About Quindell Portfolio Plc
Quindell Portfolio Plc is a provider of sector leading expertise in Software, Consulting and Technology Enabled Outsourcing in its key markets being Insurance, Telecommunications and their Related Sectors. Quindell joined the market through Mission Capital Plc, now renamed Quindell Portfolio Plc. The Company was readmitted to the market on 17 May 2011 following the acquisition of Quindell Limited prior to the immediate acquisition of Quindell’s technology and outsourcing partners. In December 2011, Mobile Doctors Group Plc was acquired increasing 2012 run-rate revenue to over �50 million. On the 1 April 2012, Ai Claims Solutions Plc became a subsidiary of Quindell, increasing run rate revenue to over �150 million. Post gaining approval by the Solicitors Regulation Authority and the acquisition of our legal businesses in December 2012, including the law firm Silverbeck Rymer, Quindell finished 2012 with run rate revenue of more than �300 million.
Our Industry Sectors
In today’s digital world the line between traditional industry sectors continues to blur, however the focus on tight service management is common to them all. We believe that excellent customer service, tight cost control and integrated supply chain management is not the prerogative of any single industry sector and with our solutions in multiple industry sectors savings of over 20% against industry norms are being delivered to the bottom line.
The pressures on an organisation can come simultaneously from multiple directions including the need to add customers, increase wallet share, reduce costs and improve customer satisfaction. At Quindell we have the People, the Processes and the Supply Chains, underpinned by our sophisticated Champion and Challenger Business Process Management Technology Platform and Industry Solutions to help our customers tackle these efficiently and effectively.
With a clear understanding that having the best products and services on offer is not always enough and that getting your customers to use or adopt them is key, effective conversion lies at the core of our unique Champion and Challenger tools and techniques. Using these solutions Quindell has helped its customers achieve sales and service conversion rates ranging from 75% to 90%, way above industry norms. But life does not stand still, and complacency can kill any business, so the embedded Champion and Challenger continual improvement focus of our Learning Solutions is at the heart of all we offer. Using our industry insight and expertise, Quindell takes the holistic view of our client’s challenges.
For example, when considering the Insurance industry today where 50% of the cost of an auto claim is associated with Personal Injury, including legal services, medical reporting and rehabilitation, it is clear that an organisation will not be able to achieve the levels of savings and customer satisfaction desired without addressing the injury to the driver as well as the repair of the vehicle. This is why at Quindell we have designed our insurance solutions and supply chains to address the full end to end cycle, with the ability and expertise to treat an injured party as well as repairing their vehicle. This makes Quindell a truly unique and ethically based proposition for the insurance industry today.
Quindell Portfolio’s companies have worked with over 2000 brands from Small to Medium Enterprises and Blue-chip organisations around the globe. Today we count a number of the world’s top Insurance and Telecommunications blue chip companies within our client base, as well as hundreds of customer centric organisations working in both the distribution and supply of their services.
Our award winning Business Transformational, Software, Consulting and Outsourcing Solutions are recognised as delivering significant savings and additional sales to our customers every year.
For further information, please visit www.quindell.com.