Hellman & Friedman is considering a sale of insurance software provider Applied Systems in a transaction that could value the business at as much as $10bn, according to a report by Reuters citing unnamed people familiar with the matter.
The private equity firm has engaged JPMorgan and Goldman Sachs to advise on the potential transaction, which has drawn interest from prospective buyers, the sources said. They requested anonymity because the discussions are confidential.
Hellman & Friedman, Applied Systems, JPMorgan, and Goldman Sachs all reportedly declined to comment.
Chicago-headquartered Applied Systems develops software used by insurance agencies and brokerages to manage customer relationships, administer policies and handle other operational processes. Its customers include major insurance brokerages such as HUB International, Insurance Office of America and The Baldwin Group.
The company generates more than $550m in annual earnings before interest, taxes, depreciation and amortisation, according to one of the sources.
Hellman & Friedman acquired Applied Systems from Bain Capital in early 2014 in a transaction valued at about $1.8bn.
A deal at the reported valuation would make the potential exit one of the year’s larger software buyouts and provide a test of investor demand for established software businesses. It comes amid a broader revival in software M&A, following ServiceNow’s $7.7bn purchase of cybersecurity company Armis and Hg’s $6.4bn take-private of financial software provider OneStream.
