By Jeff Sanford
Toronto, Ontario -- September 15, 2015 -- After several weeks of rumours and anticipation the sale of AudaExplore/Audatex parent company Solera has been announced. Vista Equity will pay a mighty $6.5 billion for the company.
The deal is not unexpected. Executives at Solera recently voted to award bonus packages to convince executives to stay in the event of a sale. Several private equity firms had been rumoured to be showing interest.
Vista also owns EagleView Technology, a 3-D measurement software for the property and casualty insurance industry, and DealerSocket, a software package for auto dealerships.
The price, $6.5 billion, was a bit of a surprise. This represents a massive premium over a late August valuation of $3.25 billion. Clearly, Vista thinks the Solera business is a winner. In a press statement announcing the sale Vista CEO and Chairman Robert F. Smith was quoted as saying, “We are thrilled to be partnering with Solera. For almost half a century Solera has been serving the insurance and automotive industries with innovative software and information solutions. With the portfolio of products the company has built and acquired, combined with the vision of its leadership, we believe Solera is incredibly well positioned for the next fifty years. The mission is clear and the opportunity is there to continue to transform how physical assets are managed and insured.”
The deal will close in early 2016. It is the largest in the history of Vista according to a Reuters report. The deal values Solera’s stock at $55.85 a share. In August, before the speculation about a sale picked up, stock was trading at just $36.39. Investors who have been longer term holders are going to do really well on this sale.
In 2014 the New York Times ran a piece on Vista suggesting that the firm’s acquisitions “release more reliable software more frequently, customer satisfaction rises and profitability improves.” So collision repair centres that use Audatex may see a boost in service as the company transitions to Vista ownership.
“We are extremely excited about working with Vista to further strengthen Solera’s global leadership in risk and asset management technologies,” said Solera founder and CEO Tony Aquila in the press statement.
The New York Times piece also noted that Vista is not like some private equity funds that sometimes split up a company to sell off the pieces:
“Instead of stripping out costs from the companies it acquires, Vista usually adds sales and engineering talent. And instead of searching for candidates with Ivy League degrees and prestigious internships, Vista looks for workers who have leadership potential and innate analytical abilities ... as well as [considering] a candidate’s interest in the arts and humanities, Vista assembles a decidedly unusual work force.”
As previously reported in Collision Repair magazine, founder and CEO Tony Aquila will receive $9 million for staying with the company until August 22, 2016. Chief Financial Officer Renato Geiger will make $815,000 if he stays until August of next year. General Counsel Jason Brady will earn a $3.5 million bonus if he sticks around. Boyd/Gerber uses similar bonuses to maintain continuity in the case of acquisitions.