Vista Equity Partners buys Duck Creek for $2.6 billion in cash

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Insurance software provider Duck Creek Technologies said it has entered into an agreement to be purchased by Vista Equity Partners in an all-cash deal worth approximately $2.6 billion.

Pending approval by Duck Creek shareholders and regulatory approvals, the transaction is expected to close in the second calendar quarter. Once completed, Duck Creek will become a privately owned company. The agreement also includes a “go-shop” period ending February 7.

“This transaction is a testament to the value of the Duck Creek platform, the success of our strategy and the strength of our incredible team. After a well-considered and thoughtful process, the Board of Directors has approved this transaction, which will deliver great returns to Duck Creek shareholders by providing them with secure and substantial cash value at an attractive premium,” said Michael Jackowski, CEO of Duck Creek, in a statement. “Duck Creek is proud to have pioneered cloud-based mission-critical systems for the P&C insurance industry to deliver a best-in-class customer experience. We are excited to enter the next chapter for Duck Creek in partnership with Vista Equity Partners to continue to support P&C insurers’ move to the cloud.”

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Under the terms of the agreement, Duck Creek shareholders will receive $19.00 per share in cash, representing a premium of 46% over the closing price of Duck Creek (NASDAQ: DCT) on January 6, 2023, and a premium of approximately 64% on the volume-weighted average price of Duck Creek stock for the 30 days ending January 6, 2023.

“Duck Creek is playing an outsized role in accelerating cloud strategies and unlocking all the benefits they offer in this critical sector of today’s economy,” said Monti Saroya, senior managing director and co-head of Vista’s Flagship Fund. “Duck Creek’s modern cloud architecture and proven market traction position it to define the next generation of mission-critical technology for P&C insurance.”

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Vista Equity invests exclusively in enterprise software, data and technology-enabled organizations. Along with Bain Capital, Vista Equity owned insurance software maker Vertafore, paying $2.7 billion in 2016. Florida-based Roper Technologies subsequently agreed to acquire Vertafore in an all-cash transaction valued at approximately $5.35 billion in August 2020. The company also purchased Applied Systems, a provider of insurance software and agency management systems, in 2004 Two years later, Bain Capital acquired a controlling interest in Applied Systems from Vista Equity, with longtime CEO Jim Kellner retaining a major stake in the company. Vista Equity has also invested in Zywave in the past.

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Earlier this month, Duck Creek, whose clients include insurers AIG, Berkshire Hathaway, Chubb, Progressive, Axis and Markel, announced a definitive agreement to acquire Imburse Payments. The terms of the deal have not been disclosed.

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