Tuesday, August 2, 2011

Congratulations to Goldrock Israel Growth on IDIT

Goldrock Israel Growth - our vintage 2009 growth equity fund in Israel - recently experienced its first exit with the sale of IDIT Technologies to Sapiens (Nasdaq: SPNS). Press article on the closing below:

Sapiens Closes Merger with FIS, IDIT
By Anthony O'Donnell       
July 21, 2011
Sapiens International Corp. (Rehovot, Israel) has signed a definitive agreement to merge with Cardiff U.K. life and pensions core system provider FIS Software and Beit Dagan, Israel-based IDIT Technologies, a provider of property/casualty insurance solutions. The deal brings Sapiens' global customer base to over 70 and will result in revenues reaching $100 million in 2012 -- double the company's 2010 revenue -- asserts Sapiens CEO Roni Al-Dor.
The deal brings Sapiens into the ranks of very few vendors with established core systems across the life/annuities/pensions, property/casualty and reinsurance sectors and brings important synergies to the component companies, according to industry analysts.
FIS brings Sapiens what the vendor calls a comprehensive, enterprise-level solution for life, pension and annuity, with a global client base across the U.K., Europe, Asia Pacific and North America. IDIT offers a full suite of solutions, constituting a single, end-to-end component-based, integrated solution for the P&C insurance market, with a focus on Europe, the U.K., Australia and the rest of the Asia Pacific region.
"Sapiens' move shows that it is serious about building a portfolio of insurance core systems offerings, both for the U.S. and internationally, across life and P&C," comments Matthew Josefowitz, principal of New York-based research and advisory firm Novarica. "Sapiens' success following the [2010] acquisition of Harcase, which has good momentum based on a recent implementation [of the vendor's RapidSure solution] at Philadelphia Insurance Companies [Bala Cynwyd, Pa.], indicates that it should be able to leverage these new acquisitions well."
The proof will be in the pudding, as integration of acquired companies can bring unforeseen complexities, notes another industry observer who declines to comment on the record. In a statement Sapiens has characterized the deal as promising that the company will "become a major global insurance solutions provider." The company has struggled in the past to succeed in the insurance software market but is on a comeback trajectory. Sapiens has turned around from operational loss and significant debt to three years of profitability and a positive cash flow.
Sapiens' merger with FIS and IDIT will bring a very positive result to the organization as it is now constituted, says Donald Light, a San Francisco-based senior analyst with Celent (Boston). Light characterizes the deal as positioning Sapiens for significant presence and growth.
"We see IDIT as a very strong solution in the European and Middle Eastern markets, and Sapiens has been taking some good steps forward to gain traction in the North American market with the acquisition of Harcase and its RapidSure [P&C] solution," Light comments. "The larger revenue base will play very well in the North American market."
"From a North American insurance company point of view, an important issue is whether a vendor is going to be around in five or ten years," Light adds. "This new organization will have a very positive answer to those types of questions."
Regarding the question of whether Sapiens would introduce IDIT to North America or whether RapidSure would be the foundation of the vendor's P&C policy administration efforts in that region, Light commented, "That's a big road map question that they need to resolve and communicate."
Sapiens CEO Roni Al-Dor clarified the matter:
"RapidSure is the P&C product we will continue to offer for the NA market," Al-Dor says. "It has been well accepted and has a growing customer base. We will now be able to further enhance it with billing and claims that we will bring from IDIT and adjust to the NA market. For life and pensions, we will continue to further develop and enhance the FIS suite as it has been gaining market awareness and acceptance."

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