Insurance software provider SSP has entered into an agreement to acquire the entire issued and to be issued ordinary share capital of insurance and financial services software firm Sirius Financial Solutions, in a deal worth around GBP43.4 million.
The combination is expected to create a UK market-leading insurance software provider, as well as a platform to expand the enlarged business internationally.
In the UK, the business will have a strong presence in the areas of general insurance relating to regional brokers, call centers, small intermediaries, major brokers, underwriting agencies and insurance companies. The combined entity is also expected to establish a strong presence in the systems sector relating to large financial advisers.
Combining the UK businesses of SSP and Sirius will further develop SSP’s ‘consumer to carrier’ proposition and maintain strong relationships with brokers and insurance companies as they continue to rationalize the distribution of insurance, the two companies said in a joint release.
Outside the UK, SSP has offices in Ireland, Denmark and South Africa, while Sirius’ offices are in Australia, New Zealand, Kenya, India and the US. With these complementary networks of offices, the business will have customers in over 50 countries. Combining their operations will bring additional potential for growth in Australasia, South Africa and other parts of Africa, the US, the Caribbean and India, as well as in Europe.
In addition, the enlarged group will benefit from the wider distribution of a greater variety of personal lines products and the combined expertise in internet and electronic trading of personal and small commercial insurance.
The companies said that, as there is not a significant overlap in markets covered, the existing products of both companies, including Sirius products Sirius 21, Sirius for Insurance and Swift, and SSP products SSP electraM3, SSP sector, SSP insight and SSP insure J, will all continue to be developed and both companies products will continue to be supported in line with existing commitments.
As world insurance markets become more competitive, there is a shift towards an internet and electronic trading model. Our combined presence and knowledge of this market will provide significant expansion opportunities, commented David Rasche, executive chairman of SSP. This transaction should help improve efficiencies for insurance distribution and bring additional capabilities for our enlarged customer base, particularly in electronic trading and web enablement.
Following formal approval of the acquisition proposal, SSP will announce a new board structure. David Rasche will continue as executive chairman, with Stephen Verrall, currently Sirius’ chairman and chief executive, becoming deputy chairman with particular focus on supporting the integration process and group strategy. Laurence Walker, SSP’s managing director, will become group chief executive, and Gren Folwell will continue as senior independent director.