Sapiens Acquired by Advent for $25 Billion, 47.5% Premium

Sapiens International, a prominent global provider of cloud-based software solutions for the insurance industry, has announced a definitive agreement to be acquired by private equity firm Advent for 25 billion dollars in an all-cash transaction. This acquisition is set to be one of the largest private equity deals in the insurance technology sector in recent years. Under the terms of the agreement, Sapiens shareholders will receive 43.5 dollars in cash per share, representing a 47.5% premium over the stock's closing price of 29.5 dollars on the Nasdaq on the previous Tuesday. The transaction has been unanimously approved by the company's board of directors and will result in the delisting of Sapiens, which is currently listed on both the Nasdaq and the Tel Aviv Stock Exchange.

Founded in 1982 and headquartered in Rochelle Park, New Jersey, Sapiens provides specialized software solutions for life insurance, pension, annuity, and property and casualty insurance companies. In recent years, the company has been focusing on expanding its Software as a Service (SaaS) and artificial intelligence (AI) product offerings. Advent has expressed its intention to accelerate this transformation process.

The Chief Executive Officer of Sapiens highlighted that this transaction marks a significant milestone in the company's development. The collaboration with Advent will enable Sapiens to continue supporting its insurance clients in their digital transformation efforts and to deliver the innovative services they expect. Advent's Director emphasized the importance of transitioning to cloud technology and data-driven tools for insurance companies, given the pressures to enhance profitability and operational resilience. Advent plans to work closely with Sapiens to increase investments in technology innovation, AI, and customer experience.

The largest shareholder of Sapiens, Formula Systems, will retain a minority stake in the company following the transaction. The Chief Executive Officer of Formula Systems believes that the strategic partnership with Advent will significantly drive Sapiens' upgrade to a next-generation insurance software platform.

The acquisition is expected to be completed by the end of 2025 or early 2026, marking the end of Sapiens' decades-long history as a publicly traded company. Advent has secured the necessary funds for the acquisition through debt financing and equity commitments, including a 13 billion dollar contribution from its managed funds.

This acquisition is the result of Formula Group's nearly two-year-long plan to sell its stake. The group holds 44% of Sapiens' shares, with other major shareholders including BlackRock and Vanguard Group. Based on the acquisition price, the Chief Executive Officer's 1.55% stake is valued at approximately 30 million dollars.

Sapiens and Formula Systems had engaged the services of the U.S. investment bank to find potential buyers as early as the beginning of last year. Although the sale process started early, it was temporarily halted following the outbreak of the "Iron Sword" operation on October 7th of last year.

As a leading provider of insurance and pension fund management software, Sapiens has been focusing on its cloud transformation strategy in recent years and has accelerated its expansion into the European and American markets through acquisitions. In the first quarter of 2025, the company acquired Candela for 22 million dollars and AdvantageGo for 58 million dollars. However, integration challenges led to a reduction in the company's 2025 operating profit forecast from 100 million dollars to 95 million dollars.

The controlling shareholder of Formula is the Polish-listed company, with the Chief Executive Officer holding an 11% personal stake valued at approximately 6.76 billion new shekels. Other major shareholders include Harel, Menora Mivtachim, and Clal Insurance, all of which are large institutional investors. This transaction is expected to enhance Formula's valuation and bring substantial returns to the major institutions that manage long-term public savings.