(Image source: Duck Creek website.)
Duck Creek Technologies (Boston), a global technology solutions provider to the property/casualty insurance industry, announced this morning that it has entered into a definitive agreement to be acquired by Vista Equity Partners (Austin, Texas), a global investment firm focused exclusively on enterprise software, data and technology-enabled businesses, for $19.00 per share, in an all-cash transaction valued at approximately $2.6 billion. Upon completion of the transaction, Duck Creek’s common stock will no longer be publicly listed, and Duck Creek will become a privately held company.
Under the terms of the agreement, Duck Creek shareholders will receive $19.00 per share in cash, which represents a 46 percent premium to Duck Creek’s closing stock price on January 6, 2023, the last full trading day prior to the transaction announcement, and a premium of approximately 64 percent over the volume weighted average price of Duck Creek’s stock for the 30 days ending January 6, 2023, according to a joint statement from Duck Creek and Vista Equity Partners.
Transaction negotiations were led by a Special Committee of the Duck Creek Board of Directors, composed entirely of independent and disinterested directors, the joint statement says. Following the recommendation of the Special Committee, the Duck Creek Board of Directors approved the merger agreement with Vista Equity Partners.
The transaction is expected to close in the second calendar quarter of 2023, subject to the satisfaction of customary closing conditions, including approval by Duck Creek’s stockholders and U.S. antitrust clearance. Vista Equity Partners says it intends to finance the transaction with fully committed equity financing that is not subject to any financing condition.
“This transaction is a testament to the value of the Duck Creek platform, the success of our strategy and the strength of our incredible team, comments Mike Jackowski, CEO, Duck Creek. “Following a deliberate and thoughtful process, the board approved this transaction which delivers a great outcome for Duck Creek’s shareholders, providing them a certain and substantial cash value at an attractive premium.”
“Duck Creek is proud to have pioneered cloud-based mission-critical systems for the P&C insurance industry to deliver a best-in-class customer experience,” Jackowski continues. “We are excited to enter the next chapter for Duck Creek in partnership with Vista Equity Partners to continue supporting P&C insurance carriers’ move to the cloud.”
Outsized Role in Accelerating Cloud Strategies
“Duck Creek is playing an outsized role in accelerating cloud strategies and unlocking all the advantages they provide this crucial sector of today’s economy,” comments Monti Saroya, Senior Managing Director and Co-Head of Vista’s Flagship Fund. “Duck Creek’s modern cloud architecture and demonstrated market traction position it to define the next generation of mission-critical technology for P&C insurance.”
“Vista has an established track record of partnering with leading enterprise software businesses within the insurance industry and related verticals,” says Jeff Wilson, Managing Director, Vista Equity Partners. “We are excited to work with the Duck Creek team as we look to build on their best-in-class platform and solutions, which serve many of the world’s leading P&C insurance carriers.”
The agreement includes a “go-shop” period expiring at 11:59 p.m. Eastern time on February 7, 2023, which allows Duck Creek’s board of directors and its advisors to actively initiate, solicit and consider alternative acquisition proposals from third parties, according to the joint statement. Duck Creek’s board of directors will have the right to terminate the merger agreement to enter into a superior proposal subject to the terms and conditions of the merger agreement. There can be no assurance that this “go-shop” will result in a superior proposal, and Duck Creek says that it does not intend to disclose developments with respect to the solicitation process unless and until it determines such disclosure is appropriate or otherwise required.