Solera Holdings to Acquire Explore Information Services, $520M (SLH)

Solera Holdings, Inc. SLH today announced that it has signed a definitive agreement to purchase 100% of the membership interests of Explore Information Services, LLC, a leading U.S. provider of innovative data and analytics services used by automotive property and casualty insurers.  Explore's driver violation reporting services deliver cost-effective information to P&C insurers allowing them to increase premiums when re-underwriting automotive insurance policies.  Explore's high-value, subscription-based products employ proprietary processes that aggregate, standardize and match data gathered from 42 state governments. Explore's services are utilized by 130 U.S. P&C insurers, including 14 of the top 20 U.S. P&C insurers. By acquiring Explore, Solera will fuel its expansion into the re-underwriting and analytics products and services for the P&C insurance industry.  These applications are often used by customers before and after their use of Solera's core partial loss solutions. Explore's products will also allow Solera to offer solutions to its P&C insurance customers that can help them actively manage risk during the full life cycle of a policy, which can improve their ability to capture lost premiums. Explore's current offerings are focused on the North American P&C insurance market. Under the terms of the Agreement, Solera will purchase 100% of Explore's outstanding membership interests at closing for approximately $520 million. The entire purchase price will be paid in cash.  The structure of the transaction will result in a 15-year tax benefit to Solera with an estimated present value of approximately $120 million.  Explore's revenue for the twelve months ended December 31, 2010 was $76.8 million. After adjusting for the estimated value of the tax benefit, the purchase price represents a multiple of 11.8x Explore's Adjusted EBITDA of $33.9 million for the twelve months ended December 31, 2010.  The transaction is subject to certain conditions to closing and is expected to close in the first quarter of Solera's fiscal year ending June 30, 2012. Solera expects the acquisition to add approximately $0.15 - $0.17 to its fiscal year 2012 Adjusted Net Income per diluted common share.