Quindell buys software house Metaskil in £4.5m deal

Acquisitive outsourcer Quindell Portfolio has bought insurance software house Metaskil for 40 million shares.

Based on Quindell’s closing price of 11.25p yesterday, the software house was valued at £4.5m.

Under the terms of the deal, Metaskil pledged to make a profit before tax of around £632,000 for the year to 30 September 2013, and generate cash of no less than £316,000.

The shares will be subject to lock-in of between 12 and 36 months from the date of issue.

Quindell said in a statement that according to management accounts, Metaskil’s run-rate revenues for the year to 30 September 2012 are around £3m, of which a significant portion is recurring.

It also said it expected the deal to enhance the company’s earnings per share “slightly” in the remainder of the 2012 calendar year, but added it would “significantly” enhance earnings in 2013.

Metaskil’s strengths

Metaskil develops a suite of technology products called Open Square, which includes a rating engine called Napier. This engine is currently being used by “the largest telematics insurer in the UK”, according to Quindell, which is also one of Quindell’s key charter clients.

Quindell said Napier’s flexibility and functionality will allow it to accelerate the development of new products and propositions with its insurance and affiliate clients.

The outsourcer added that itself and Metaskil already shared a number of clients, and that Metaskil’s client list included Insurethebox and Aon, as well as BT, FSA, Vodafone, Royal Mail and Thames Water.

Quindell said it was already working with Metaskil’s products and developers in a number of pilot projects, and had established a significant pipeline of joint opportunities within the top tier personal lines insurers in the UK, with first proof of concept being commissioned by a top five insurer within the past week.

Quindell chairman and chief executive Rob Terry (pictured) said: “We are already working with Metaskil in a number of strategic accounts, including the largest telematics insurer in the UK as well as a number of other blue-chip organisations, and I am confident that together we can help Metaskil to grow their transactional revenues significantly.

“In addition, Metaskil’s resourcing capabilities will be a real advantage as we grow our resource base to support the significant demand for our technology and outsourcing solutions.”