Solera Holdings Inc., a global provider of software and services to the automobile insurance claims processing and decision support industries, said Nov. 20 it has acquired all of the equity interests of CAP Automotive, a provider of real-time valuations and specifications for new and used vehicles in the United Kingdom, for $463.8 million in cash. CAP’s solutions provide pricing transparency for vehicle transactions and enable buyers and sellers of vehicles to make accurate pricing decisions. The acquisition creates the only UK-based enterprise with decision support data and software solutions spanning vehicle valuation, validation, collision and mechanical repair and total cost of ownership. On an annual basis, CAP currently processes more than 18 million valuations.
CAP’s customers include more than 400 out of the 535 largest dealer groups, 100 percent of the major banks that finance vehicle purchases and 100 percent of the largest fleet, credit hire and leasing firms in the UK. Tony Aquila, Solera’s founder, chairman and chief executive officer, said the acquisition of CAP is the latest in a series of investments in the company’s risk and asset management strategy, adding capabilities that create a unique “digital garage.” “Expanding our valuation services through CAP will connect our investments and grow our presence in each phase of the vehicle lifecycle, from purchase, through SMR, to sale or salvage,” Aquila said.
For the 12 months ended Sept. 30, 2014, CAP’s run rate revenue and adjusted EBITDA were $46.0 million and $26.7 million, respectively. The acquisition will provide Solera with a 12-year tax benefit with an estimated present value of $35.3 million. In addition, the acquisition will enable Solera to use NOLs through fiscal year 2018 with an estimated present value of $6.5 million. After adjusting for the estimated value of the tax benefit and NOLs, the purchase price is $422.8 million. Net of the recently-completed $400 million private placement of senior notes, Solera expects the acquisition to add 1 cent to fiscal year 2015 cash EPS and 4 cents on an annualized basis. In addition to its acquisition of CAP Automotive, Solera Holdings announced that its board of directors approved a new $375 million common stock repurchase program effective through Dec. 31, 2016. This program opens additional repurchase alternatives, enabling the company to purchase shares of common stock through an accelerated stock purchase agreement, on the open market or in privately negotiated transactions. Solera expects to fund the repurchases through cash on hand and future cash flow from operations.
The new stock repurchase program replaces the company’s previous stock repurchase program. Through Nov. 19, 2014, Solera has repurchased a total of 4,150,708 shares of its common stock under the two previous stock repurchase programs for an aggregate purchase price of $219.7 million, or an average of $52.93 per share. Solera Holdings Inc. is headquartered in Westlake and is traded on the New York Stock Exchange under the symbol SLH. The company is active in more than 69 countries across six continents. –Betty Dillard firstname.lastname@example.org