GTCR notches deal for claims services platform

GTCR Golder Rauner has made its first acquisition through its Solera claims services platform, buying an ADP division for $975m.

Almost one year after launching Solera Inc., Chicago’s GTCR Golder Rauner has inked its first deal for the platform, acquiring the claims services division of Automatic Data Processing (ADP). The transaction gives the unit an enterprise value of $975 million (€815 million).

GTCR established Solera in February of last year, partnering with Tony Aquila, a former executive at insurance claims software provider Mitchell International. The goal of the partnership was to establish a company that provides consultation, outsourced services and technology to insurance companies, with a particular focus on the auto physical damage claims segment of the market.

Craig Bondy, principal, GTCR Golder Rauner

At the time, GTCR committed $100 million to the platform, but Craig Bondy, a principal at the firm, told PEO that it would increase that commitment in connection with the ADP deal. He would not, however, specify GTCR’s exact equity stake.

The equity is coming out of the firm’s eighth fund, the 2003-vintage GTCR Fund VIII LP, a $1.85 billion vehicle. Goldman Sachs and Citigroup have been tapped to supply a debt package to help finance the acquisition.

Bondy added that following the ADP deal, the platform would not actively pursue other acquisitions, although it could strike smaller deals if the right opportunities arise.

“This is the largest franchise on a global basis,” Bondy said, describing the ADP unit, adding that Solera could look to enter new markets in Asia, the Middle East or Central Europe.
The unit posted revenues of $415 million last year, and in the first half of the 2006 fiscal year, has been showing growth of more than four percent.

Kirkland & Ellis served as legal counsel to the buyers, while PricewaterhouseCoopers assisted with the accounting due diligence.