Apax Partners to Acquire Most of Duck Creek Technologies; Accenture to Retain Minority Interest
Robert Regis Hyle | April 19, 2016
Accenture and Apax Partners have agreed to form a joint venture in which Apax will acquire a 60 percent stake in Accenture’s Duck Creek Technologies, with Accenture retaining a 40 percent stake. The joint venture will operate as a new and independent company.
Cindy DeArmond, a managing director at Accenture, reports the deal will accelerate the development of Duck Creek products and technologies, leveraging advanced digital and cloud technology, and extend the reach of Duck Creek in key markets. As part of the venture, Accenture 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.
“We formed this partnership to celebrate the development of Duck Creek,” says DeArmond. “We are doing this so we can feed the innovation of Duck Creek and leverage the innovation and growth that we have been pushing. Apax will bring in additional investments so we can expand. We look at this as developing Duck Creek into the next generation of insurance solutions and create a more robust solution.”
Matt Foster, COO of Duck Creek, explains the deal takes what he believes is the best core systems technology and offers the opportunity to gain capital investment to expand and accelerate the solutions.
“We have a healthy appetite to expand our capabilities and we have great ideas to bring to the market,” says Foster. “We consider this a game-changing event for Duck Creek. We think we can take new things to the market for insurers.”
Duck Creek Technologies will gain access to substantial capital and management expertise through Apax Partners. This will enable further investment, both organically and through acquisitions, to fuel expansion of Duck Creek products and capabilities, particularly Duck Creek On-Demand, a native Software as a Service capability delivered through the cloud.
“We had a healthy R&D budget over the last several years and we were on an aggressive trajectory, but this puts more fuel in the tank. The second dimension is that Accenture is a premier alliance partner. The eco-system program was put in place to encourage and have SIs accelerate innovation around our product,” says Foster.
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 venture as a significant, but non-controlling minority partner.
“Over the past five years, Duck Creek has evolved into a leading global software solution for top insurers,” says Jason Wright, a partner with 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.”
Mike Jackowski, president of Duck Creek Technologies, will become CEO of the joint venture.
“There has never been a more important time for insurance companies to embrace new technologies that will secure their future competitiveness,” he says. “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, which is subject to customary closing conditions, is expected to close toward the end of Accenture’s 2016 fiscal year, which ends Aug. 31. Financial terms of the transaction were not disclosed.
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