Quindell buys North American software company Iter8

Quindell has entered into the North American market after acquiring software as a service (SaaS) company Iter8.

The deal has been completed with an immediate cash payment of £2.5m, to be followed by a further instalment of £2.5m in April 2014 and the issue of 90,285,713 Quindell shares over three years, also commencing in April next year. This will increase the total number of shares issued by the company by about 2.3% at an agreed valuation of £20.8m.

As part of the deal, Iter8 has warranted a business plan which sees the SaaS company delivering run rate profit after tax of £3m by the end of the year.

Quindell said the acquisition is “expected to be profitable and cash generative in 2013 and to be significantly earnings enhancing in 2014”.

Iter8 co-founder and executive vice-president Tim Scurry said: “Iter8 is dominant in the Canadian broker and insurer market, and has significant presence in the US. Having worked closely with Guidewire on a number of implementations, we have been extremely impressed by Quindell’s technology capabilities and their knowledge of insurance best practice.

“With our two technology sets now integrated and first client implementations contracted we are very confident that we can use our knowledge and standing within the North American market to excellent effect to accelerate Quindell’s technology and outsourcing growth in North America over the coming years.”

Quindell chairman and chief executive Rob Terry (pictured) said: “We are thrilled to be announcing this acquisition and to be welcoming the Iter8 team into the Quindell group. Their experience and standing in this market provides us with an excellent platform on which to base the expansion of our insurance technology into North America.

“The teams have worked closely over the past year to develop a pipeline of opportunities including those relating to the roll out of telematics based insurance models for the Canadian market with existing customers. On the basis of the considerable success being generated, we entered into a joint distribution agreement at the end of 2012. Having been able to work closely with them, we have confirmed that our two technologies are highly compatible and complementary, and we look forward to announcing new deals in this market in due course.”