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UK Vendor Quindell Acquires iter8 to Gain North American Foothold

Quindell will leverage iter8's significant footprint in the agent/broker technology space to gain market share in the new business technology arena during the coming year.

Quindell Portfolio Plc, a provider of software, consulting and outsourced solutions to the insurance and telecommunications industries, has acquired Toronto-based iter8, a provider of SaaS-based solutions to the insurance broker and agent market.

Under the terms of the deal, Quindell paid £2.5 million ($3.85 million) initially, to be followed by a further cash payment of the same amount in April 2014 as well as the issue over a three year period of 90,285,713 Quindell shares in three equal annual installments commencing April 2014, according to a statement from Quindell.

[For more insurance solutions M&A news, see SAP's Cummings: Camilion Acquisition Adds Value for U.S. Clients.]

Quindell explains the acquisition as the basis of the Hampshire, England-based vendor's entry into the North American market. A Quindell statement notes iter8's significant position in that market in general, and a "dominant" position in Canada, with over 70% of the Canadian distribution market. iter8 currently has over 40 major implementations for clients ranging from large multinational insurers such as Aviva, Allstate, Allianz, Chub and Zurich, to smaller niche players. The vendor expects the acquisition to be profitable and "cash generative" by the end of this year, with significant uptick in earnings in 2014 as the Quindell expects to begin to gain market share of new business technology.

Deb Smallwood, SMA
Deb Smallwood, SMA
Deb Smallwood, founder of SMA, characterizes the deal as an interesting play to leverage a relationship with an ancillary provider to get a foothold in the North American core systems market. "Although the North American core system market is highly competitive and saturated with many players, the bottom line is that the spend and priority are both still very significant, and many new entries want a part of it, even if it is small piece," she comments.

"All in all, it’s seems like a good match – combining a robust portal offering to a core system creating a powerful offering," Smallwood adds. "Depending on the integration strategy and plan, it may help the core system more than it helps the standalone portal solution. The portal may get lost in the shadow of core, it usually does."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio

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KBurger
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KBurger,
User Rank: Author
4/24/2013 | 5:54:25 PM
re: UK Vendor Quindell Acquires iter8 to Gain North American Foothold
Based on Deb's comments -- does it looks like more non-US insurance sw vendors are likely to be entering the US market? There was the announcement last week that Xuber is entering the US to target the commercial lines segment. And if this is a trend -- is it because of market opportunity or because of the financial/debt/euro problems in Europe? Rethinking of opportunities in the BRICs?
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