Westlake, Texas -- May 14, 2014 -- Solera Holdings has signed a definitive agreement to acquire the Insurance and Services Division of Pittsburgh Glass Works (I&S). I&S is a provider of software and business management tools, third-party claims administration, first notice of loss and network management services to the U.S. auto and property repair industries, specializing in glass claims. The acquisition is subject to certain closing conditions, including Hart-Scott-Rodino clearance, and is expected to close in the fourth quarter of Solera's fiscal year ending June 30, 2014.
Solera says the acquisition will expand the reach of its products and services by creating the only automotive repair and claims management platform that spans collision claims, mechanical repair, glass claims and parts exchange in the U.S. Extending beyond the automotive vertical, I&S will advance our penetration of the household by leveraging its data analytics tools to power enhanced auditing services for property damage claims.
Through its three primary brands, LYNX Services, GTS Services, and GLAXIS, I&S leverages proprietary technologies, leading administration services, and the nation's largest network of independently-owned automotive glass retailers and installers to deliver a highly differentiated, end-to-end glass claims management platform. Currently serving 10 of the top 20 U.S. property and casualty insurers, LYNX Services' suite of full-service claims management solutions combines essential data, software and analytics tools to improve processing effectiveness and drive repair cost savings for auto and property claims. I&S' GLAXIS electronic hub and GTS Services' integrated supply chain management offerings streamline scheduling, dispatch and inventory management operations throughout the glass repair value chain.
Under the terms of the agreement, Solera will purchase 100 percent of the operating entities and other assets that comprise I&S' business for approximately $280 million. The entire purchase price will be paid in cash. For the twelve months ended March 31, 2014, I&S' revenue and adjusted EBITDA were $58.8 million and $19.7 million, respectively. The structure of the Acquisition will result in a 15-year tax benefit to Solera with an estimated present value of approximately $69 million. After adjusting for the estimated value of the tax benefit, the purchase price represents a multiple of 10.7x I&S' adjusted EBITDA.
"Since our founding in 2005, Solera has steadily increased value for our customers by consistently making the organic and inorganic investments required to build an unrivaled automotive technology platform across collision; service, maintenance, and repair; glass; and parts," said Tony Aquila, Solera's founder, Chairman and Chief Executive Officer. "Following the Acquisition, Solera will have assembled the only platform capable of addressing automobile repair as well as automobile collision and glass claims management in the U.S. Importantly, the Acquisition will also add a strong management team, deepen our insurer relationships, create significant cross-selling opportunities and enable enhanced data analytics that the market has not yet been able to acquire from a single provider."