Cloud computing concept. Businessman in prayerGuidewire, a software company focused on the P/C industry, will buy a tech outfit specializing in cloud computing for about $160 million in cash. The acquisition also helps it access the small carrier market.

Guidewire Software announced its agreement to acquire ISCS on Dec. 19, and disclosed the price on an SEC 8-K regulatory filing.

Both companies are based in California, and the acquisition looks to be a complementary fit.

Guidewire’s software helps P/C insurers with their core operations, data and analytics and digital management, and the company says it has more than 260 customers globally who have used its products.

ISCS is also focused exclusively on the P/C insurance industry, but it is expansively in the cloud computing space. Specific areas of focus include policy administration, underwriting, claims, billing, business intelligence, reinsurance and mobile product. ISCS touts its customers as including more than 35 insurance organizations “writing all P/C lines” across the country, according to its web site.

Guidwire said the acquisition will accelerate its entry into the cloud computing business, and ISCS sees the M&A deal as broadening its reach.

ISCS’s “technology and expertise will enable us to provide a new option to our customers and augment our progress in delivering cloud-based products,” Guidewire Chief Executive Officer Marcus Ryu said in a prepared statement. “We are excited by the opportunity to welcome the ISCS team and customers to our community.”

Guidewire, which is based in Foster City, California, said it will be bringing on 220 ISCS employees as part of the deal.

Ryu said during an analyst call focused on the deal that Guidewire has done well in the larger carrier market. He added that the “economic opportunity is just as great with smaller insurers.” Ryu added Guidewire seeks to be the industry standard and smaller insurers make up a large part of the industry.

“After the acquisition, Guidewire will be better positioned to address the entirety of our market opportunity,” he said in the call with analysts.

He praised ISCS as having “hands down” the best tech offering available for smaller insurers.

In addition, Ryu said the deal represents an opportunity for Guidewire to cross sell some of its data products to ISCS customers as well as to “internationalize” ISCS products to sell to small insurers in foreign countries. Guidewire itself now sells in 20 countries.

Guidewire CFO Richard Hart said smaller insurers are more likely to buy a cloud-based model. He said there is “very little overlap” with Guidewire’s current customer base.

ISCS CEO and founder Andy Scurto said the deal gives his company the ability to grow in multiple ways.

“The breath of Guidewire’s offerings and the scale of its organization will enable us to provide additional value to our customers,” Scurto said, also in prepared remarks. “We also appreciate the strong affinity between the companies in terms of focus and culture.

In August, Guidewire acquired FirstBest Systems for $34 million in cash, in a deal it said will boost its capacity to serve property/casualty insurers focused on complex commercial risks.

That deal followed Guidewire’s March 2016 acquisition of EagleEye Analytics, a provider of SaaS-based predictive analytics products specifically designed for property/casualty insurers.
Source: Guidewire

*Material from a related Insurance Journal story was used in this story.