U.S. Markets open in 43 mins

Verisk Analytics (VRSK) Signs Agreement for Rulebook Buyout

Verisk Analytics, Inc. VRSK announced yesterday that it has inscribed an agreement to acquire business intelligence and software solutions provider for the London Insurance Market, Rulebook.

The transaction price is fixed at $87 million, which will be funded through cash on hand and existing bank facilities.

Through Rulebook Hub platform, Rulebook possesses a distinct pricing engine utilized for the purpose of internal pricing and underwriting as well as external distribution for the specialty insurance market. It also offers data analytics that provide business intelligence solutions to aid clients in historical, current, and predictive views of business operations.

Mark Anquillare, chief operating officer, Verisk, stated, "Rulebook is a Verisk-like business that furthers our goal of providing leading solutions to the global insurance market, including a comprehensive chain of solutions to specialty insurers for mitigating risk and optimizing total cost of operations."

The transaction is expected to be completed by the fourth quarter of 2018, subject to customary closing conditions.

Shares of Verisk have fared well in a year’s time. The stock has rallied 30% compared with the industry’s rise of 9.9%.


Our Take

We believe that the buyout will boost the Insurance segment that offers analytics in the areas of fraud detection, catastrophe modeling, loss estimation and underwriting. Performance in the segment was particularly strong in the last reported quarter with revenues of $427.7 million, up 8% year over year on a reported basis and 5.5% at organic constant currency (cc).

In the segment, underwriting and rating revenues of $285.1 million rose 8.9% on a reported basis and 6.3% at organic cc.

Verisk estimates the transaction to be accretive to the company’s adjusted EPS in 2019. Also, the company expects the buyout to generate an attractive return in excess of the company's cost of capital.

Zacks Rank & Stocks to Consider

Currently, Verisk carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A few better-ranked stocks in the Zacks Business Services sector are Total System Services, Inc. TSS, WEX Inc. WEX and Robert Half International Inc. RHI, each carrying a Zacks Rank #2 (Buy).

The long-term expected EPS (three to five years) growth rate for Total System Services, WEX and Robert Half International is 14.2%, 15%, and 13.3%, respectively.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Verisk Analytics, Inc. (VRSK) : Free Stock Analysis Report
WEX Inc. (WEX) : Free Stock Analysis Report
Robert Half International Inc. (RHI) : Free Stock Analysis Report
Total System Services, Inc. (TSS) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research