Sapiens plans to pay up to $31.6 million for sum.cumo, an InsurTech based in Germany that provides technology and consulting services to the insurance sector and other customers.
Both sides expect to close the deal half-way through the 2020 first quarter, pending regulatory approvals.
Sapiens, an insurance software provider headquartered in Israel, said the acquisition will help it expand products and services to Germany, Switzerland and Austria, where sum.cumo primarily operates. Sapiens said it will continue to invest in and support sum.cumo’s offerings and also beef up its own digital products and services globally through sum.cumo’s tech and expertise.
According to the deal announcement, sum.cumo is a technology provider that focuses on the insurance and lottery sectors with “disruptive innovation and customer-centric [products and services] based on the latest technologies.” The company’s specialists help insurers gain a marketing edge through consulting, user experience, front-end development, back-end development and marketing products/services, with a focus on the digital arena.
Sum.cumo launched in 2010 and was formerly owned by die Bayerische Versicherungsgruppe, currently one of its customers. Sum.cumo has more than 150 technology and insurance experts and serves customers in Germany and Switzerland from offices in Hamburg, Düsseldorf and Zurich, the deal announcement noted.
Roni Al-Dor, Sapiens’ president and CEO, said the company’s planned purchase of sum.cumo follows an ongoing strategy of accelerating growth through focused acquisitions.
“We are a strategic buyer that acquires companies that fit our mission, vision and culture. Sum.cumo met our parameters as one of the most innovative InsurTech companies in the region,” Al-Dor said in prepared remarks.
Al-Dor added that growing into Germany, Switzerland and Austria has been part of its long-term growth strategy.
Björn Freter, sum.cumo’s founder and co-CEO, said that Sapiens’ acquisition of his operation will help the company grow better and support its customers “while also helping them evolve and thrive.”
Sapiens said that sum.cumo should produce $16.7 million in non-GAAP revenues for 2019, as well as “low single-digit profitability.” The bulk of the purchase price is covered by cash, with a small amount of the acquisition paid for with Sapiens shares. Future customer retention and performance over the next four years could also affect the final pay-out, Sapiens said.