LONDON, UK / ACCESSWIRE / October 9, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Guidewire Software, Inc. (NYSE: GWRE), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=GWRE. The Company announced on October 06, 2017, that it has signed a definitive agreement to acquire Cyence Inc., a software Company that works towards applying data science and risk analytics for underwriting the underinsured or uninsured risks of the 21st century. The acquisition would allow Guidewire to offer cloud-based data listening and risk analytics solutions to P&C insurers. For immediate access to our complimentary reports, including today's coverage, register for free now at:
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A Total Consideration of $275 million
- As per the agreement, the total consideration for the acquisition is $275 million, or $265 million net of $10 million cash on hand. This, however, is subject to certain customary transaction adjustments.
- This consideration comprises net cash of nearly $140 million and approximately 1.6 million shares of newly issued Guidewire's common stock. Out of these shares, around 260,000 are in the form of deferred equity consideration, which are subject to the achievement of several retention and operating milestones.
- It is anticipated that the transaction would close early in Guidewire's second fiscal quarter.
The 21st Century Underinsured Risks
The emerging risks of the 21st century such as cyber, reputation, and new forms of business interruption risk pose serious challenges for insurers. These risks are evolving rapidly, and they lack the extensive claims history to guide insurers' underwriting and pricing determinations. Thus, their complexity, non-obvious patterns of risk linkage as well as risk accumulation necessitate more diverse and dynamic data sets to be modeled effectively.
To overcome these challenges, Cyence provides a data listening and risk analytics solution that combines internet-scale collection and curation of external data with sophisticated machine learning and risk modeling. This facilitates insurers' product management, actuarial, underwriting, and enterprise risk management functions.
Guidewire to Benefit from Cyence's Next-generation Approach
Cyence enables the insurance industry to understand the impact of emerging 21st-century risks such as cyber, business interruption, etc. Cyence's exclusive data science combines data collection at scale, machine learning and economic/risk modeling to create an insurance risk-modeling platform. Insurance industry leaders extensively leverage Cyence's platform and analytics to recognize as well as manage risks so as to roll out new transformative insurance products.
Marcus Ryu, co-founder and CEO at Guidewire Software, shared his views about the acquisition. He stated that Cyence is an exceptional technology Company that strives to serve the strategic needs of the property and casualty (P&C) insurance industry, just like Guidewire.
Guidewire focuses on core operations, data management, and digital engagement while Cyence applies expertise in data science and machine learning to the modeling needs of insurance product design, pricing, and underwriting for 21st-century risks. He mentioned that traditional actuarial approaches struggle to address the unique challenges of the emerging 21st-century risks. But Cyence's next-generation approach would enable insurers to extend the scope of the products that their policyholders need.
Positive Remarks from Cyence's CEO
Arvind Parthasarathi, co-founder and CEO, at Cyence also expressed his excitement on the acquisition. This move represents an opportunity for Cyence to complement its approach with operational data and policy lifecycle support from Guidewire's core systems, and also to join hands with the technology leader serving the P&C insurance industry.
Arvind highlighted that Cyence has started applying its data science engine to cyber risk, owing to increasing demand from the insurance industry for the existential threat for their insured. He shared that his team looks forward to joining Guidewire's team and extend its mission to enable insurers to enter new markets by insuring emerging cyber risks.
About Guidewire Software
Guidewire provides the software that P&C insurers need to adapt and succeed in the rapidly changing industry. The Company combines three elements – core operations, data and analytics, and digital engagement – into a platform that advances insurers' ability to engage and empower their customers as well as employees. Over 300 P&C insurers around the world have selected Guidewire software.
Last Close Stock Review
At the closing bell, on Friday, October 06, 2017, Guidewire Software's stock was marginally up 0.99%, ending the trading session at $78.24. A total volume of 550.92 thousand shares have exchanged hands, which was higher than the 3-month average volume of 487.45 thousand shares. The Company's stock price soared 12.84% in the last three months, 32.43% in the past six months, and 31.25% in the previous twelve months. Moreover, the stock skyrocketed 58.61% since the start of the year. The stock is trading at a PE ratio of 304.44 and currently has a market cap of $5.86 billion.
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