(Image credit: Adobe Stock.)
Apax Partners, a London-based global private equity firm, will acquire a 60 percent stake in Accenture’s (New York/Dublin) Duck Creek Technologies, with Accenture retaining a 40 percent stake, according to an Accenture statement. The firms characterize the deal as a joint venture to accelerate the innovation of claims, billing and policy administration software, and say that the new entity will operate as an independent company. Duck Creek’s senior management, and approximately 1,000 insurance and insurance software specialists are expected to join the new joint venture. Accenture will own 40 percent of the resulting entity as a significant, but non-controlling minority partner. Mike Jackowski, president of Duck Creek Technologies, will become CEO of new entity.
The deal will enable Accenture Duck Creek to achieve more intense focus as a vertical insurance software supplier, suggests Matthew Josefowicz, president and CEO, Novarica (Boston). “This transaction underscores the distinctiveness of the insurance technology marketplace,” he says. “Insurance core systems sales and delivery has its own rhythm and its small community of buyers place extremely high priority on vertical experience and expertise. Firms with a more vertical focus at the strategic level will continue to have an advantage in this extremely vertical market.”
Leveraging Advanced Digital and Cloud Technology
The new arrangement is intended to further accelerate the development of Duck Creek products and technologies, leveraging advanced digital and cloud technology, and to extend the reach of Duck Creek in key markets, the Accenture statement says. Accenture reports that it will collaborate with Duck Creek to help insurers take advantage of the Internet of Things, Big Data analytics and other emerging technologies. Accenture will also be designated as a premier systems integrator and consulting partner for Duck Creek Technologies pursuant to a strategic alliance arrangement.
Through the deal, Duck Creek Technologies will gain access to substantial capital and management expertise through Apax Partners, according to Accenture. That will enable further investment, both organically and through acquisitions, to fuel rapid expansion of Duck Creek products and capabilities—particularly Duck Creek On-Demand, a native Software as a Service capability delivered through the cloud. Combined, this capital, technology and professional services capability will enable new levels of end-to-end, cloud-based solutions for P&C insurers, Accenture says.
“The insurance sector is on the cusp of a digital revolution that will redefine how it operates,” comments John Cusano, senior managing director and head of Accenture’s global insurance practice. “This joint venture will open the door to a brave new stage of development. Apax’s record of investing in technologies that become category-leaders has made them an ideal partner in this venture. We look forward to helping shape and deliver leading-edge digital technologies for our clients through this agreement and maintaining a substantial interest in Duck Creek’s growth and success.”
“Over the past five years, Duck Creek has evolved into a leading global software solution for top insurers,” comments Jason Wright, partner, Apax. “Apax intends to build upon this success by supporting the current management team to accelerate innovation in partnership with Accenture and its significant digital and insurance domain expertise. We believe this joint venture will be a game changer in the insurance technology arena.”
“There has never been a more important time for insurance companies to embrace new technologies that will secure their future competitiveness,” Jackowski comments. “Working with Accenture and Apax, we look forward to continued development and added investments that will deliver true innovation for the insurance industry, now and well into the future.”
The transaction is expected to close toward the end of Accenture’s 2016 fiscal year, Aug. 31. Financial terms of the transaction were not disclosed.