Verisk expands residential insurance push with $2.4 billion AccuLynx deal
FILE PHOTO: U.S. Dollar banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File photo
Data analytics firm Verisk said on Wednesday it will buy AccuLynx, which makes software for roofing contractors, for $2.35 billion as it looks for a bigger foothold in a key segment of the residential insurance market.
The all-cash deal could allow Verisk to simplify interactions between insurers and contractors, which it says will speed up claims and lower expenses for policyholders.
The deal also highlights growing interest in home repair companies, as severe weather and rising repair costs pressure both insurers and homeowners. Roofing is one of the most expensive components of property insurance.
The acquisition, scheduled to close by the end of the third quarter, is expected to add to Verisk's adjusted earnings per share by the end of 2026. Its shares rose 2 per cent before the open.
Goldman Sachs and PJT Partners are serving as financial advisers to Verisk, while William Blair advised AccuLynx.
EARNINGS BEAT
Verisk also reported better-than-expected profit for the second quarter on Wednesday, driven by strong demand from property and casualty insurers for its underwriting risk assessment tools.
Adverse weather has prompted P&C insurers to spend more on analytics to better assess policy risks.
On an adjusted basis, Verisk earned $1.88 per share in the second quarter, beating analysts' estimates of $1.77, according to data compiled by LSEG.
On reported basis, the company's underwriting revenue increased 8.3 per cent in the quarter, while claims revenue climbed 6.6 per cent.
New Jersey-based Verisk now expects adjusted earnings per share between $6.80 and $7.00 for 2025, a slightly narrower range compared with $6.80 to $7.10 it had expected earlier.
But the company raised its full-year revenue forecast to between $3.09 billion and $3.13 billion, up from $3.03 billion to $3.08 billion earlier.
